Goldman Sachs Sees Fed on Hold Longer, Pencils In December Rate Cut

Goldman Sachs has pushed back its forecast for the next two Federal Reserve rate cuts to December 2026 and March 2027.

The revision comes as the bank expects inflation in 2026 to be higher than the Fed’s 2% target.

Inflation Forces Goldman Sachs to Rethink Fed Rate Cut Calendar

Goldman’s report highlighted that energy cost pass-through will likely keep core Personal Consumption Expenditures (PCE) inflation near 3% throughout 2026. Previously, the International Monetary Fund (IMF) also projected that core PCE would return to 2% only in early 2027.

Meanwhile, Goldman’s US economists argued cooler monthly readings and weaker labor data must arrive first for the rate cuts.

The Federal Open Market Committee held the federal funds rate at 3.50% to 3.75% on April 29, reporting stable economic conditions across most districts. That meeting drew four dissents, the most since 1992.

Also, Goldman Sachs Asset Management’s Lindsay Rosner previously said hawks could gain ground at the June FOMC meeting. 

“The FOMC could well feel compelled to remove the easing bias from its next post-meeting statement in June, which would suggest the hawks are gaining the upper hand on the committee,” Rosner noted.

What Sticky Rates Mean for Crypto Markets

Delayed rate cuts tighten liquidity flowing into risk assets like Bitcoin (BTC) and Ethereum (ETH). CME FedWatch places a 93.4% probability on the Fed holding rates at its June 17 meeting.

A stronger dollar tied to that outlook tends to compress crypto valuations across the board.

Altcoins typically absorb the heaviest selling when liquidity tightens. However, Bitcoin’s inflation hedge narrative could regain traction if energy-driven price pressures intensify further.

Traders now eye upcoming PCE data and the June 17 FOMC decision for the next directional cue. A hawkish shift in Fed language could deepen pressure on speculative crypto positioning into Q3.

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