Goldman Sachs maintained its expectation regarding Fed interest rate cuts, but stated that the timing of these steps remains uncertain due to global developments and economic data.
Goldman Sachs expects the Fed to cut interest rates twice this year.
Lindsay Rosner, head of multi-asset fixed income investments at Goldman Sachs, said that emerging signals of weakening in the labor market are a significant warning for the Fed. According to Rosner, delaying interest rate cuts could create economic costs. Furthermore, the short-term monetary policy outlook is significantly affected by the uncertainty created by the ongoing conflict in the Middle East.
Rosner stated that developments in Iran and their potential inflationary effects have overshadowed US employment data, further increasing uncertainty about the outlook for monetary policy normalization. Goldman Sachs said it expects the Fed to complete the remaining two normalization cuts in order to ultimately bring interest rates closer to a “neutral” level, but that predicting the precise timing of these steps is difficult in the current climate of uncertainty.
On the other hand, the latest employment data from the US also signaled a slowdown in the economy. Seasonally adjusted non-farm payrolls fell by 92,000 people in February, reaching negative levels for the first time since October 2025. Market expectations were for an increase of 59,000 people.
During the same period, the US unemployment rate also rose. In February, the unemployment rate climbed to 4.4%, reaching its highest level since December 2025 and exceeding market expectations of 4.3%.
*This is not investment advice.