Goldman Sachs Predicts Two Fed Rate Cuts in 2026, Terminal Rate Seen at 3–3.25%

Goldman Sachs expects the U.S. Federal Reserve to cut interest rates twice in 2026, with each move reducing the federal funds rate by 25 basis points. This would bring the terminal interest rate to a range of 3.00%–3.25%.

The bank's macro research team cited the moderation of inflationary pressures and a slowing labor market as key factors for further easing, following the expected cuts at the end of 2025.

Market Implications

Stocks and Risk Assets: Lower borrowing costs could support U.S. stocks, technology growth stocks, and high-risk assets like cryptocurrencies.

Dollar Index (DXY): Rate cuts may weaken the U.S. dollar, potentially boosting commodities and emerging market currencies.

Cryptocurrency Markets: Historical data shows that Bitcoin and Ethereum often benefit from a more accommodative monetary environment, with institutional inflows increasing during easing cycles.