Goldman Sachs Pushes Back Fed Rate Cut Forecast to September

Major financial institutions in the United States are adjusting their monetary policy forecasts as rising energy costs and geopolitical tensions reintroduce inflation risks. The Goldman Sachs Group, Inc. led the shift on Thursday, becoming the first major brokerage to push its expected interest rate cut from June to September 2026. This change reflects growing concerns over higher oil prices resulting from the escalating conflict in the Middle East. The Federal Open Market Committee is set to meet on March 18, an event that will be closely watched for signals regarding the future of the federal funds rate. While some brokerages had previously anticipated easing to begin in the first half of the year, several have now delayed their timelines or eliminated cut projections entirely. Citigroup Inc. remains among the most dovish, projecting 75 basis points in total cuts for 2026, with moves expected in April, July, and September. This would target a rate of 2.75-3.00%. Following its recent revision, Goldman Sachs now forecasts 50 basis points of easing through two cuts in September and December, aiming for a 3.00-3.25% range. Several other firms also anticipate 50 basis points of total easing but differ on the timing. Morgan Stanley and Nomura Holdings, Inc. both expect cuts in June and September. Bank of America Corporation foresees reductions in June and July, while Wells Fargo & Company anticipates earlier action in March and June. Barclays PLC projects cuts in June and December, and UBS Group AG expects easing to occur between June and October across its various research divisions. A more cautious outlook is provided by Deutsche Bank AG, which forecasts only a single 25-basis-point cut in September. Meanwhile, a significant group of global banks, including BNP Paribas S.A., HSBC Holdings plc, JPMorgan Chase & Co., and Standard Chartered PLC, currently expect no rate cuts in 2026, leaving the rate at 3.50-3.75%. This cautious stance aligns with an earlier projection from JPMorgan Chase & Co. that suggested the next policy move could be a hike in 2027. Diverging from the consensus, MACQUARIE GROUP LTD has forecasted a rate hike as early as the fourth quarter of 2026, highlighting the lack of uniformity among Wall Street analysts regarding the economic trajectory.