Goldman Sachs Reaffirms Two Fed Rate Cuts This Year, Next Move Seen in June

Goldman Sachs said it continues to expect the U.S. Federal Reserve to cut interest rates twice this year, with the next reduction likely to come in June, as inflation pressures show signs of easing.Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, said the January consumer price index (CPI) data was “not as strong as feared,” helping clarify the Fed’s path toward policy normalization, according to a report cited by Jin10.Rosner noted that the outlook remains closely tied to labor market conditions, emphasizing that the Federal Reserve and the Federal Open Market Committee are particularly sensitive to signs of employment weakness.“If the labor market continues to show improvement, the normalization path becomes clearer,” she said, adding that Goldman’s base case remains two rate cuts in 2026, with the next cut expected in June.The assessment aligns with broader market expectations that easing inflation will eventually allow the Fed to lower borrowing costs, even as policymakers remain cautious about declaring victory over price pressures.