Goldman Sachs now sees the next Fed rate cut coming months earlier

Published: July 1, 2025 at 6:59 a.m. ET

Federal Reserve Chair Jerome Powell may welcome market pricing predicting a faster pace of rate cuts Photo: Win McNamee/Getty Images

Goldman Sachs now expects the Federal Reserve will make its next interest rate cut in September, and not December as previously thought, as tariffs have less of an inflationary impact than earlier feared.

In a note released Monday, Goldman economist Jan Hatzius and team said they do not expect the Fed to lower official borrowing costs this month, unless Thursday’s nonfarm payrolls report is weaker than expected. They now see three 25 basis-point cuts in September, October and December.