Goldman Sachs is holding firm on its call for three Federal Reserve rate cuts in 2026, even as crude oil prices surge nearly 18% year-to-date on the back of the escalating US-Iran conflict and fresh inflation fears ripple through global markets.
The forecast, which Goldman economists have maintained through multiple rounds of geopolitical turbulence this year, stands out as one of the most dovish calls on Wall Street. With the Fed funds rate still elevated after last week’s decision to hold rates steady at the March FOMC meeting, most rival banks have trimmed or delayed their easing expectations.
Goldman Sachs Forecast · 2026
3 Fed Rate Cuts
Goldman Sachs projects three 25 bp Fed cuts in 2026 despite oil-driven inflation risks tied to the US-Iran conflict.
What Goldman Is Actually Forecasting
Goldman Sachs projects three 25-basis-point rate cuts beginning in the second half of 2026, which would bring the federal funds rate down by 75 basis points from its current level. The bank’s economists have pointed to a cooling labor market and a core inflation trajectory that, in their view, remains on a downward path despite recent headline disruptions.
This is not a new call. Goldman initially laid out its 2026 rate cut outlook earlier this year, then pushed back the expected start date after softer jobs data in January. The March reaffirmation is notable precisely because conditions have worsened, not improved, on the inflation front.
The bank’s core argument rests on a distinction between transitory supply-driven price shocks and the sticky demand-side inflation the Fed has been fighting since 2022. Goldman’s view: oil-driven CPI spikes do not warrant a change in the underlying rate trajectory.
The Oil Surge That Should Have Killed the Dovish Case
Brent crude has rallied roughly 18% since January as the US-Iran conflict has disrupted Middle East supply routes and rattled energy markets globally. The conflict, which escalated sharply in recent weeks with strikes on Iranian energy infrastructure, has pushed oil well above the levels most central bank models treat as manageable.
Oil Markets · 2026 YTD
+18% Crude Rally
Brent crude has surged roughly 18% year-to-date as the US-Iran conflict disrupts Middle East supply routes, fuelling inflation concerns that most analysts say should delay Fed cuts.
Several major banks have responded to the oil shock by trimming their rate cut forecasts. Consensus among economists has shifted toward fewer cuts than previously expected, with some forecasting only one or two reductions this year.
Goldman acknowledges the oil risk but treats the price spike as a supply-side shock that the Fed will look through rather than react to with tighter policy. The bank argues that core PCE, which strips out volatile food and energy prices, remains on a trajectory consistent with eventual easing. It is a bet that the Fed will prioritize the labor market over headline CPI.
That bet carries real risk. If oil prices remain elevated and begin feeding into services inflation through transportation and logistics costs, the “transitory” framing could collapse quickly.
What This Means for Crypto and Risk Assets
For crypto markets, the Goldman forecast matters because rate expectations are one of the strongest macro drivers of digital asset valuations. Bitcoin and altcoins have historically performed well during monetary easing cycles, when lower yields push capital toward higher-risk, higher-return assets.
During the 2024 rate cut cycle, Bitcoin rallied significantly as the Fed began lowering rates, with institutional inflows accelerating into spot BTC ETFs. A repeat of that dynamic in the second half of 2026, as Goldman expects cuts to begin, could provide a tailwind for risk assets broadly.
However, the current environment is more complicated. The US-Iran conflict has introduced a risk-off dynamic that has weighed on Bitcoin in recent weeks, as oil-driven geopolitical uncertainty competes with dovish macro expectations. The broader crypto ecosystem is also navigating its own structural shifts that may blunt any macro tailwind.
The next key catalyst is the April FOMC meeting, followed by the May jobs report and CPI print. If Goldman’s thesis is correct, softening employment data through Q2 will give the Fed cover to begin signaling cuts, potentially shifting crypto market sentiment ahead of any actual rate reduction.
For now, Goldman’s forecast is a minority position on Wall Street. Whether it becomes consensus will depend on whether the oil surge stays contained, or bleeds into the kind of broad-based inflation that forces the Fed to stay higher for longer.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
