tl;dr
Goldman Sachs analysts have upgraded their S&P 500 projections, anticipating more than a 50% chance of U.S. Federal Reserve interest rate cuts starting in September, earlier than previously expected. They forecast multiple 25-basis-point cuts through mid-2026, citing milder impacts from tariffs and ...
Analysts at Goldman Sachs have upgraded their S&P 500 projections following new predictions of interest rate cuts by the U.S. Federal Reserve. Goldman Sachs Research economists now see more than a 50% chance that the Fed will reduce rates at the upcoming Federal Open Market Committee (FOMC) meeting in September—three months earlier than previously expected.
The economists forecast a series of 25-basis-point rate cuts in September, October, December, and again in March and June of 2026. This more optimistic outlook stems partly from early signs suggesting that the impact of President Donald Trump’s tariffs has been less severe than initially anticipated.
David Mericle, chief U.S. economist at Goldman Sachs Research, highlighted that while finding employment has become somewhat more challenging, the overall U.S. labor market remains robust. Supporting this, the CME FedWatch Tool indicates a 62.7% probability that the Fed will cut rates by 25 basis points in September, with these odds derived from 30-day Fed Funds futures prices.
The implications of this forecast led Goldman Sachs strategists to raise their 12-month S&P 500 target from 6,500 to 6,900 and increased their year-end projection from 6,100 to 6,600. At the time of writing, the S&P 500 is trading at 6,225.52, showing gains of 0.5% over the past five days and 3.66% over the last month, reflecting investor optimism amid these evolving economic signals.