📋 Bonds 🎯 US10Y 📉 Bearish 📅 Short-term 🌍 United States

Goldman, BofA Delay Fed Cut Calls After ‘Last Straw’ Jobs Data

Q: What prompted Goldman and BofA to delay their Fed cut calls?

A stronger-than-expected jobs report, which they termed the 'last straw', showed persistent labor market strength that reduces the urgency for rate cuts.

Q: How did bond markets react to the revised forecasts?

Bond yields jumped, with the 10-year yield climbing to a new year-to-date high, as traders priced in a higher-for-longer rate environment.

Q: What does this mean for investors?

Higher rates support the dollar and hurt bond prices; equity valuations may compress, especially for growth stocks sensitive to discount rates.

Goldman Sachs and BofA delay Fed cut calls after robust US jobs data, unleashing a bond sell-off that lifts Treasury yields and fuels dollar strength.

📅 May 11, 2026 🕐 1 min read 📰 Bloomberg

#Bank of America #bond-market #Bonds #DXY

Impact

8/10

Confidence

80%

Key Catalysts

▼ Stronger-than-expected US payrolls report labeled the 'last straw' by bond watchers ▼ Goldman Sachs and Bank of America formally delayed their first rate-cut forecasts to later 2026 or 2027 ▼ Fed funds futures repriced to only one quarter-point cut by end-2026, down from two previously

🎯 Affected Markets

🌐 Markets

US10Y

📉 Bearish 📅 Short-term 🤖 85%

Goldman and BofA delaying rate cuts due to robust jobs data, intensifying a bond sell-off that pushed the 10-year yield to a new year-to-date high.

US02Y ~

📉 Bearish 📅 Short-term 🤖 80%

2-year yields jumped above 4.3% as the near-term rate path repriced dramatically following the jobs report.

TLT ~

📉 Bearish 📅 Short-term 🤖 75%

Long-duration Treasury ETF TLT faces price declines as yields surge across the curve on delayed-cut expectations.

💱 Forex

DXY

📈 Bullish 📅 Short-term 🤖 82%

Dollar strengthened broadly as higher-for-longer US rates widened yield differentials, with the index rallying to fresh session highs.

EUR/USD ~

📉 Bearish 📅 Short-term 🤖 78%

EUR/USD fell under 1.05 as broad dollar buying intensified, driven by delayed Fed cut bets after the US jobs print.

📊 Indices

SPX ~

📉 Bearish 📅 Short-term 🤖 72%

Equities declined as higher discount rates and reduced rate-cut prospects weighed on risk appetite, with the S&P 500 selling off.

💡 Key Takeaways

Goldman Sachs and Bank of America pushed back their first Fed rate cut call after an unexpectedly strong US jobs report.
The payrolls number was described as the 'last straw' that dashed hopes for near-term monetary easing.
Treasury yields surged, with the 2-year note yield climbing above 4.3% as markets repriced the rate path.
Fed funds futures now imply only one quarter-point cut by end-2026, down from two previously.
The dollar index rallied on the back of higher rate differentials, while equities declined.
Bond market volatility spiked, signaling uncertainty over the Fed's policy trajectory.
Analysts warn that tight labor markets could keep inflation sticky, delaying rate normalization further.

📋 Executive Summary

Strong US jobs data prompts Goldman Sachs and Bank of America to push out Federal Reserve rate cut forecasts. The payrolls print was the 'last straw' for bond watchers, triggering a repricing of rate expectations. Treasury yields surged, with 2-year yields climbing above 4.3%, while the dollar strengthened and equities faced headwinds from higher discount rates.

📊 Sentiment Analysis

Sentiment

📉 Bearish

Impact Score

8/10

Confidence

80%

Timeframe

📅 Short-term

Region

🌍 United States

Asset Class

📋 Bonds

▼ Driving lower

Stronger-than-expected US payrolls report labeled the 'last straw' by bond watchers Goldman Sachs and Bank of America formally delayed their first rate-cut forecasts to later 2026 or 2027 Fed funds futures repriced to only one quarter-point cut by end-2026, down from two previously

▲ Upside risks

Subsequent downward revision of the jobs data could undermine the hawkish pivot A sharp equity sell-off forcing the Fed into an emergency cut despite labor strength Unexpected dovish commentary from key Fed officials reversing the rate reprice

🧠 Reasoning

The article title frames the jobs data as the 'last straw' that forced top banks to postpone rate-cut expectations, a clear hawkish shift. This directly pressures bond prices (bearish) and lifts the dollar, while creating a more challenging environment for equities. No offsetting dovish signals are mentioned.

❓ Frequently Asked Questions

What prompted Goldman and BofA to delay their Fed cut calls?

How did bond markets react to the revised forecasts?

What does this mean for investors?

📰 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.