Goldman Sachs expects the Federal Reserve to begin cutting interest rates in September, projecting three consecutive 25bp reductions—one at each meeting through year-end— provided inflation expectations stay anchored.
- September 16-17
- October 28-29
- December 9-10
The bank emphasises that the easing cycle is contingent on inflation not flaring up again, but with current trends holding, it sees room for a gradual but steady policy pivot.
Goldman’s forecast of three straight Fed rate cuts starting in September adds weight to the growing dovish tilt in market pricing. If inflation expectations stay contained, front-end yields could fall further, supporting risk assets, particularly rate-sensitive sectors like tech and real estate. The dollar may face renewed downward pressure, while gold and EM assets could benefit from a more accommodative Fed path.
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Separately, Goldman Sachs say that there’s growing market concern over the Fed’s independence, as 5-year, 5-year forward inflation swaps have recently broken away to the upside, diverging from their previously tight correlation with 2-year Treasury yields.
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