🌐 General 🎯 DXY 📉 Bearish 📅 Short-term 🌍 United States

Goldman Sees Fed Cuts Delayed to December, March on Inflation

Q: When does Goldman now expect the first Fed rate cut?

Goldman strategists now forecast the first 25-basis-point cut in December 2026, delayed from their previous September 2026 call, with a second cut following in March 2027.

Q: What inflation data triggered the revised outlook?

Core PCE inflation running at 3.1% year-over-year and average hourly earnings up 4.2% kept price pressures above the Fed's comfort zone, forcing Goldman to push out its easing timeline.

Q: How are markets reacting to the Goldman forecast?

The dollar strengthened to 102.50, the 10-year Treasury yield climbed to 4.65%, and S&P 500 futures slipped 0.6%, as tighter monetary conditions weigh on risk appetite.

Goldman Sachs shifts Fed rate-cut forecast to December 2026 and March 2027 on persistent inflation, lifting the dollar and Treasury yields while pressuring stocks, crypto, and gold.

📅 May 9, 2026 🕐 1 min read 📰 Bloomberg

#BTC/USD #DXY #EUR/USD #Federal Reserve

Impact

7/10

Confidence

85%

Key Catalysts

▼ Goldman Sachs revised its Fed rate cut forecast to December 2026 from September ▼ Core PCE inflation held at 3.1% year-over-year, well above the 2% target ▼ Average hourly earnings growth of 4.2% signaled persistent wage pressures

🎯 Affected Markets

📊 Indices

SPX ~

📉 Bearish 📅 Short-term 🤖 78%

Goldman's delayed rate cut forecast lifted the 10-year yield to 4.65%, driving S&P 500 futures 0.6% lower as higher discount rates compress equity valuations.

NDX ~

📉 Bearish 📅 Short-term 🤖 80%

Tech-heavy Nasdaq 100 sold off 0.9% after Goldman pushed the first Fed cut to December 2026, hurting rate-sensitive growth stocks that rely on low borrowing costs.

🏭 Commodities

XAU/USD ~

📉 Bearish 📅 Short-term 🤖 80%

Gold slipped to $2,310 as the DXY rose to 102.50 and real yields increased following the hawkish Goldman note; higher opportunity cost weighs on non-yielding bullion.

💱 Forex

DXY

📈 Bullish 📅 Short-term 🤖 85%

The dollar index climbed to 102.50 directly after Goldman cited sticky core PCE at 3.1% and delayed the rate-cut timeline, widening rate differentials in the dollar's favor.

EUR/USD ~

📉 Bearish 📅 Short-term 🤖 82%

EUR/USD dropped to 1.0700 on broad dollar strength as the Goldman note pushed the euro lower; the pair faces headwinds from a hawkish Fed and a dovish ECB.

USD/JPY ~

📈 Bullish 📅 Short-term 🤖 83%

USD/JPY rose to 152.80 as the 10-year Treasury yield jumped to 4.65%, widening the U.S.-Japan rate gap and boosting the dollar against the yen.

🌐 Markets

US10Y

📉 Bearish 📅 Short-term 🤖 85%

The 10-year Treasury yield print at 4.65% reflected the hawkish repricing after Goldman pushed cuts to December 2026; bond prices fell as inflation concerns lingered.

₿ Crypto

BTC/USD ~

📉 Bearish 📅 Short-term 🤖 75%

Bitcoin slipped 2.3% to $58,200 as the higher-for-longer rate narrative sapped risk appetite; crypto often declines when dollar and yields rise.

💡 Key Takeaways

Goldman Sachs now projects the first Fed rate cut in December 2026, three months later than its prior September call.
A second cut is forecast for March 2027, suggesting only 50 basis points of total easing over the next 18 months.
Core PCE inflation at 3.1% and wage growth at 4.2% keep the Federal Reserve firmly on hold.
The DXY dollar index rallied to 102.50, and the 10-year Treasury yield rose to 4.65% on the hawkish revision.
S&P 500 futures dropped 0.6% and the Nasdaq 100 fell 0.9%, reflecting selling in rate-sensitive growth stocks.
Market-implied probability of a December 2026 cut jumped to 70% after Goldman's note circulated.
Higher-for-longer rates tighten financial conditions globally, pressuring gold, crypto, and emerging-market assets.

📋 Executive Summary

Goldman Sachs economists pushed their first expected Fed rate cut to December 2026 from September, citing sticky core PCE at 3.1% and wage growth of 4.2%. The dollar index rose to 102.50 and the 10-year Treasury yield hit 4.65%, tightening financial conditions across assets. The second cut is now penciled in for March 2027, reinforcing a higher-for-longer rate environment that weighs on equities and gold.

📊 Sentiment Analysis

Sentiment

📉 Bearish

Impact Score

7/10

Confidence

85%

Timeframe

📅 Short-term

Region

🌍 United States

Asset Class

🌐 General

▼ Driving lower

Goldman Sachs revised its Fed rate cut forecast to December 2026 from September Core PCE inflation held at 3.1% year-over-year, well above the 2% target Average hourly earnings growth of 4.2% signaled persistent wage pressures

▲ Upside risks

A sudden drop in inflation readings could pull forward rate-cut expectations An economic downturn or banking stress might force the Fed to ease earlier Geopolitical shocks that crash risk assets could alter the Fed's path

🧠 Reasoning

Goldman specifically flagged core PCE at 3.1% year-over-year and average hourly earnings climbing 4.2%, both well above Fed comfort zones. The bank's previous call for a September 2026 reduction was abandoned after the hot data, directly pushing the DXY to 102.50. The delayed timeline signals prolonged tight policy, sapping risk appetite across rate-sensitive sectors.

❓ Frequently Asked Questions

When does Goldman now expect the first Fed rate cut?

What inflation data triggered the revised outlook?

How are markets reacting to the Goldman forecast?

📰 Source

Bloomberg bloomberg.com

🔗 View Original Article

⚠️ Disclaimer: This content is for training purposes only and should not be considered financial advice. Always conduct your own research before making investment decisions.