Goldman Sachs has just pushed back its forecast for the Fed’s first rate cut to December 2026. The reason? The war in Iran is driving up U.S. inflation and forcing the bank to completely revise its timeline. This is unprecedented. 📉
🔍 What’s happening?
According to Reuters, Goldman Sachs has pushed back its forecast for the Federal Reserve’s first monetary easing by at least six months. The New York-based bank had previously anticipated a cut as early as June 2026.
The armed conflict between the United States and Iran is driving up energy prices and causing an inflationary spike that is seriously complicating Jerome Powell’s task. Goldman economists now estimate that the Fed won’t have the leeway to ease its policy before the end of next year.
💡 Why does this matter?
For those of you trading the dollar or US indices, this is a major paradigm shift. Rates that stay high longer mean high borrowing costs, continued pressure on tech valuations, and a dollar that remains strong against other currencies. Currently, the EUR/USD is trading at 1.1768, and this announcement is likely to keep downward pressure on the euro.
On the macro front, war-related energy inflation is a game-changer for all risky assets. US bonds remain attractive with high yields, drawing capital away from equity markets. And in Europe, the ECB could find itself caught between a Fed that’s holding steady and rising imported inflation.
📊 Our take
For us, the verdict is clear: Goldman is right. The Fed cannot cut rates as long as energy inflation is soaring.
We are witnessing a return to the 1970s scenario, where an external oil shock forces central banks into a restrictive stance. The difference this time: markets had already priced in rate cuts for 2026, and this revision will trigger a sharp repricing of yield curves. Traders positioned for a dovish pivot by the Fed will suffer. In Europe, the AMF and the ECB are closely monitoring the impact on bond flows, because if the Fed remains hawkish, Frankfurt will struggle to diverge without sending the euro below 1.10.
We anticipate the S&P 500 coming under pressure in the coming months and the dollar reigning supreme until further notice. For French traders: favor EUR/USD shorts and stay away from overvalued U.S. tech stocks until the Fed gives a clear signal of easing.
✅ Key takeaway
- Goldman Sachs pushes back the first Fed rate cut to December 2026
- The war in Iran is driving up US energy inflation
- Prolonged high rates weigh on stock valuations
- The dollar remains strong against the euro and other currencies
- Markets must reprice their expectations for monetary easing
What do you think? Are you betting on an even stronger dollar, or do you think inflation will fall faster than expected?
🔎 See also
For more insights, check out all our stock market analyses on ActuTrading Stocks 📈
Source: Reuters, Goldman Sachs
