Goldman Sachs sets the 2026 interest rate cut roadmap: a 25 basis point cut in June and September respectively, with employment data causing disruptions

Goldman Sachs today released its 2026 economic outlook, predicting that the U.S. economy will continue to experience strong growth alongside moderate inflation. The Federal Reserve is expected to cut interest rates twice more this year, with 25 basis point cuts in June and September. Once this forecast was announced, it immediately drew market attention—because just three days ago, the December non-farm payroll data had given the market a cold shower.

Rate Cut Expectations vs. Employment Data “Conflict”

Goldman Sachs’s forecast sounds very clear, but the latest employment data are “challenging” this prediction. According to U.S. Labor Department data, December non-farm employment increased by only 50,000 jobs, well below the market expectation of 60,000, marking the weakest performance since 2024. Data for the previous two months were also significantly revised downward, with October’s figures dropping by 173,000 jobs.

However, paradoxically, the unemployment rate fell to 4.4%. This “weak employment but low unemployment rate” phenomenon actually reflects a deeper issue: job seekers are actively exiting the labor force. This detail is crucial because it suggests that the labor market’s softness may be more severe than surface data indicates.

Why Goldman Sachs Still Insists on Rate Cut Expectations

This is where it gets interesting. After the latest employment data was released, traders have priced in a zero probability of a rate cut in January. Yet Goldman Sachs still maintains its forecast of two rate cuts this year. Why?

According to Goldman Sachs’s previous analysis, they believe “extreme data” is needed to change the rate cut path—that is, non-farm job gains would have to fall below 50,000 or exceed 125,000. December’s figure of 50,000 jobs is right on this boundary, representing a “borderline case.” Goldman’s logic is: although employment is weak, it hasn’t reached a “crisis” level; inflation remains moderate and controllable; economic growth is still strong. Under these conditions, the Fed has room to cut rates.

In other words, Goldman Sachs views this employment data as “economic slowdown but not recession,” fully aligning with the Fed’s desired “soft landing” scenario.

What It Means for the Crypto Market

From a crypto market perspective, the key words in this forecast are “June and September.” This implies:

• Short-term (January-May): The Fed will likely keep rates steady, which is unfavorable for risk assets. The 10-year U.S. Treasury yield is currently at 4.18%, still suppressing the attractiveness of crypto assets.
• Mid-term (from June): Once rate cuts begin, liquidity conditions will gradually improve. Historical experience shows that rate-cutting cycles are often periods of rising risk assets.
• Market Pricing: Currently, the market’s expectations for rate cuts are quite conservative. If the Fed actually cuts in June, it could become a significant catalyst for the crypto market.

Can Goldman Sachs’s Prediction Be Trusted?

Goldman Sachs’s forecast is based on the assumption of “strong growth + moderate inflation.” But the latest employment data suggest this assumption is gradually being eroded. If employment remains weak in the coming months or inflation unexpectedly rebounds, Goldman’s forecast will need to be adjusted.

However, probabilistically, Goldman Sachs’s prediction of two rate cuts is not impossible. When weighing employment and inflation goals, the Fed often acts preemptively when signals appear in the labor market. Persistent employment weakness could give the Fed enough reason to start cutting rates in June.

Summary

Goldman Sachs’s forecast provides the market with a relatively clear roadmap: hold steady in the short term, gradually loosen liquidity in the medium term. But this forecast hinges on economic data not worsening further. Although recent employment data are weak, they haven’t yet reached a level that would overturn this outlook. Crypto investors should pay attention to the trend of employment data in the coming months—if it continues to decline, the probability of a June rate cut will increase significantly, which would be a long-term positive for crypto assets. Conversely, if employment remains stable, the Fed may delay rate cuts further.