Goldman Sachs Analysts Expect December Fed Rate Cut Amid Weak Labor Market

A Reuters survey shows most economists and futures markets anticipate a December Fed rate cut, reflecting consensus on supporting a cooling U.S. labor market.

Summary

Goldman Sachs analysts and Reuters’ IFR report a strong likelihood of a Federal Reserve rate cut in December amid weak labor market signals. A Reuters survey found 82% of 108 economists expect a 25 basis point cut, aligning with futures markets showing an 85% chance. November ADP employment is projected to rise by just 10,000 versus October’s 42,000. Although expectations for 2026 remain divided with no clear quarterly majority, near-term consensus points to easing policy. Limited upcoming data supports forecasts for December action, with a policy reassessment slated for January after further jobs reports.

Terms & Concepts
  • FICC: Fixed Income, Currencies, and Commodities—divisions in investment banks focusing on debt securities, foreign exchange, and commodity markets.
  • Federal Reserve rate cut: A reduction in the interest rate set by the Federal Reserve (U.S. central bank) to influence economic growth and borrowing costs.
  • ADP jobs report: A monthly employment report by Automatic Data Processing, estimating changes in non-farm private employment in the U.S.