Treasury yields dip as Goldman Sachs flags June Fed cut

Goldman Sachs forecast: two Federal Reserve rate cuts; next June rate cut

goldman sachs expects the federal reserve to cut interest rates twice this year, with the next reduction in June, according to Goldman Sachs. The baseline assumes continued disinflation alongside a resilient labor market.

This outlook reflects recent data that have eased immediate recession concerns while keeping policy sensitive to inflation trends. Projections may change as new inflation and employment releases arrive.

Why it matters: inflation, jobs, yields, and market positioning

Rate cuts would lower policy rates, potentially easing borrowing costs and pressuring treasury yields. A softer rate path can also support equity valuations while tempering dollar strength, though outcomes hinge on incoming data.

Recent inflation readings briefly pulled yields and the dollar lower as investors shifted toward a June timeline. As reported by Finimize: “Inflation came in a touch softer than expected, lifting stocks and nudging yields and the dollar down as investors leaned toward a June cut.”

Labor data complicate timing. January non-farm payrolls significantly exceeded expectations, reinforcing the case for a cautious, data-dependent approach to easing, as reported by Futunn News.

Goldman’s June baseline is broadly consistent with a mid-2026 start to easing that several major brokerages anticipate, according to Reuters. Differences on the number of moves this year leave pricing sensitive to each inflation and jobs print.

Volatility may persist as investors recalibrate the path of policy to fresh CPI, PCE, and payroll updates. The balance between disinflation progress and labor-market strength remains the key driver.

At the time of this writing, Bitcoin (BTC) trades near 67,249, with sentiment described as Bearish and estimated 12.19% volatility, based on provided market data.

How Morgan Stanley’s view compares to Goldman Sachs

Morgan Stanley and JPMorgan signals from recent snippets

Major brokerages, including Morgan Stanley, expect the next rate cut in mid-2026, according to Reuters. That stance implies patience before initiating an easing cycle.

JPMorgan has also tilted toward later cuts, projecting a mid-2026 start to reductions, as reported by Investing.com. This indicates a more conservative trajectory than a midyear move.

Where consensus diverges on timing and number of cuts

Consensus splits on both start date and cadence. Goldman Sachs outlines two cuts this year with a June start, while peers emphasize a later, slower sequence.

Some market voices anticipate a more aggressive path. “The markets will see four rate cuts this year,” said Jonny Fine, global head of investment grade credit at Goldman Sachs, as reported by MSN.

FAQ about Federal Reserve rate cuts

Will the Fed cut interest rates in June?

Goldman Sachs expects a June cut, but the decision depends on upcoming inflation and jobs data.

How do Morgan Stanley and JPMorgan forecasts compare to Goldman Sachs?

Both tilt later, signaling a mid-2026 start, versus Goldman’s June baseline and two cuts this year.