Goldman Sachs is doubling down on its dovish rate path forecast, saying the Federal Reserve is poised to deliver five interest rate cuts through the end of next year—three in 2025 and two more in 2026—a significantly more aggressive easing cycle than markets are currently pricing in.
- SPDR Gold Trust (NYSE:GLD) ETF has rallied 26% year-to-date. See real-time price here.
In a report published Monday, Goldman economist David Mericle said he expects no change at this Wednesday’s FOMC meeting but reaffirmed the bank’s base case: 25-basis-point cuts in September, October and December, followed by two more in 2026, bringing the terminal Fed Funds rate down to 3–3.25%.
“The activity data have now begun to show clearer support for forecasts of below-potential growth than they had at the time of prior FOMC meetings,” Mericle wrote.
What’s Driving Goldman’s Call?
The firm pointed to a deceleration in consumer spending, which it said slowed more than expected in the first half of 2025—even before the full impact of Donald Trump‘s tariff …