Goldman Sachs Outlook for 2026: US Economic Growth Will Surge to 2.8%, Fed to Cut Interest Rates by 25 Basis Points in June and September.

Goldman Sachs economists pointed out that the U.S. economy will achieve steady growth this year due to multiple drivers such as tax cuts, rising real wages, and continued wealth growth, while the inflation level is expected to gradually trend towards moderation. However, given the increasingly uncertain labor market outlook, Goldman Sachs predicted in its January 11th report, "2026 U.S. Economic Outlook," that the Federal Reserve will cut interest rates by 25 basis points in June and September. David Mericle, Chief U.S. Economist at Goldman Sachs, stated in the report: "In the coming years, the composition of U.S. GDP growth will change significantly from the previous cycle - growth momentum will be more driven by the sustained rebound in productivity, especially further boosted by artificial intelligence technology; while growth driven by labor supply will significantly weaken, mainly due to a significant decline in the number of immigrants." According to a survey of economists in mid-December, they expect the U.S. GDP growth rate in 2026 to be 2%, consistent with the forecast for 2025. It is widely believed that President Trump's tax cut plan will continue America's winning streak compared to other developed economies. Goldman Sachs's forecast shows a stronger optimistic expectation: by the fourth quarter of 2026, the U.S. GDP growth rate is expected to reach 2.5%, with a full-year growth rate projected at 2.8%; by December of the same year, core PCE inflation is expected to fall to 2.1% on a year-on-year basis, while core CPI inflation will also slow to around 2%. In the base case scenario, the unemployment rate will stabilize at 4.5%, but there is a need to be cautious about the risk of a "jobless growth" phase - companies may use artificial intelligence technology to reduce labor costs, leading to a disconnect between economic growth and job growth. In the trade sector, Goldman Sachs analysis points out that the upcoming midterm elections will push the issue of living costs to become a core political issue, prompting the White House to adopt a more cautious approach to tariff policies - avoiding a significant increase in tariffs once again. Mericle explicitly pointed out in the analysis: supported by tax cuts and growth in real wages, consumer spending will show a steady expansion trend; moving into 2026, business investment is expected to become the most dynamic component of GDP growth - primarily benefiting from the continued nurturing of loose financial environment, confidence boost from reduced policy uncertainty, and direct incentives from tax policies to investment behavior.