Goldman Sachs: The Federal Reserve may be more aggressive in cutting interest rates next year, focusing on the unemployment rate rather than non-farm payrolls

According to Jin Ten, Goldman Sachs expects that the Federal Reserve may be more willing to further cut interest rates next year than the market previously assumed. Josh Schiffrin, Chief Strategist of Goldman Sachs' Global Banking and Markets division, stated that Powell's press conference signaled growing concerns within the Fed about the sustainability of employment conditions. Schiffrin believes that the upcoming employment reports will be key factors in determining whether the Fed will resume easing policies, with the market particularly focusing on the unemployment rate rather than the overall growth in non-farm payrolls. Goldman Sachs expects the easing cycle to extend into 2026, with the federal funds target rate potentially falling to 3% or lower.