Goldman Sachs Forecasts Two Fed Rate Cuts in 2026, Terminal Rate Seen at 3–3.25%

Goldman Sachs expects the U.S. Federal Reserve to cut interest rates twice in 2026, with each move reducing the federal funds rate by 25 basis points. This would bring the terminal interest rate to a range of 3.00%–3.25%.The investment bank’s macro research team cited moderating inflation pressures and a slowing labor market as key drivers for additional easing, following cuts expected later in 2025.Market ImplicationsEquities & Risk Assets: Lower borrowing costs could support U.S. equities, tech growth stocks, and high-risk assets like cryptocurrencies.Dollar Index (DXY): Rate cuts may weaken the U.S. dollar, potentially boosting commodities and emerging market currencies.Crypto Markets: Historical data shows Bitcoin and Ethereum often benefit from a looser monetary environment, with institutional inflows increasing during easing cycles.