Goldman Sachs Forecasts Federal Reserve Rate Cut in September 2026

Goldman Sachs has postponed its forecast for when the US Federal Reserve will begin cutting interest rates.

The investment bank now projects the central bank will reduce rates in September and December 2026, with each cut estimated at 25 basis points or a quarter percentage point.

The revised forecast stems from increased inflation risks triggered by Middle East tensions that are driving up energy prices. The bank’s previous projection had anticipated the first rate cut in June, followed by another in September.

Recent geopolitical tensions have heightened uncertainty across global financial markets. Conflict between the United States and Iran has sparked concerns about potential disruptions to global oil supplies, which could fuel further inflation globally.

Goldman Sachs believes the Federal Reserve’s policy direction will depend heavily on US labour market conditions and inflation developments. “In September, we expect further labour market weakness and underlying inflation progress will support the possibility of a rate cut,” the bank noted in a research update released Thursday, 12 March 2026.

Such a scenario could materialise if labour market deterioration accelerates and deepens. Weak employment figures in February have reinforced concerns about a slowdown in labour market conditions.