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<Research>G Sachs Raises US PCE Inflation Forecast to Reflect Oil Prices, Expects 1st Rate Cut to Delay to Sep
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Goldman Sachs raised its US overall PCE inflation forecast for December 2026 by 0.8 ppts to 2.9%, and its core PCE inflation forecast by 0.2 ppts to 2.4%. The broker also lowered its 4Q25 GDP growth forecast by 0.3 ppts to 2.2%, reflecting the drag from higher oil prices, tighter financial conditions and escalated geopolitical risk. Moreover, Goldman Sachs raised the probability of an economic recession within the next 12 months by 5 ppts to 25%, and postponed its forecast for the first rate cut from June to September, with the second rate cut expected in December, bringing the final interest rate to 3-3.25%. The broker's peak unemployment rate forecast rises to 4.6%. However, if the labor market weakens more significantly than expected, Goldman Sachs believed an earlier rate cut is still possible. AASTOCKS Financial News Website: www.aastocks.com |
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