Goldman Sachs pushes back Fed rate cut forecast to year-end, lowers chance of U.S. recession

Goldman Sachs adjusted its expected timing of the next Fed rate cut to December (previously expected to be July), and the bank's analysts said: "In light of the developments and the significant easing of financial conditions last month, we have raised our forecast for US economic growth in the fourth quarter of 2025 by 0.5 percentage points to 1% annualized rate, and reduced the probability of a recession in the next 12 months to 35%. At the same time, we have lowered our expectations for the core personal consumption expenditures (PCE) inflation path, and expect it to peak at 3.6% (previously expected to be 3.8%)."