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Wall Street brokerages have revised their forecasts for the Federal Reserve's rate-cut timeline, with Goldman Sachs shifting its expectation to September 2026. This follows a broader trend among analysts who now anticipate the Fed will begin cutting rates in mid-2026, citing cooling inflation and slowing economic growth as key factors. Goldman Sachs' adjustment reflects confidence in the U.S. economy's resilience, though it aligns with earlier projections of three rate cuts by year-end. The shift underscores uncertainty about the Fed's policy path, with traders closely monitoring upcoming economic data and central bank statements. The revised rate-cut timeline impacts global markets, particularly the U.S. dollar and bond yields. A delayed rate-cut cycle could strengthen the USD in the short term, affecting forex traders and emerging market currencies. Equities and commodities may also see mixed reactions, as lower rates typically boost risk assets but could delay Fed action if inflation remains sticky. Traders are advised to watch the Fed's June meeting for hints on the pace of rate cuts and inflation trends. For Gulf investors, the delayed rate cuts may influence portfolio allocations between USD-denominated assets and regional equities. The Saudi equity market could benefit from reduced capital outflows if the USD remains strong. However, Gulf-based forex traders should brace for increased volatility in USD pairs. Key indicators to monitor include U.S. nonfarm payrolls, inflation data, and the Fed's forward guidance.
