Goldman Sachs(US:GS) Zhi Tong Cai Jing·2025-12-17 08:08Group 1 - Goldman Sachs indicates that the Federal Reserve may be more willing to cut rates next year than previously expected, following recent policy easing and Chairman Jerome Powell's cautious stance on labor market risks [1] - Chief Strategist Josh Schiffman notes that Powell's recent press conference highlighted increasing concerns within the Fed regarding the sustainability of employment conditions, suggesting a lower threshold for additional rate cuts [1] - Powell acknowledged a gradual cooling of the labor market but warned that recent employment data might exaggerate potential job growth, emphasizing significant downside risks to labor conditions [1] Group 2 - Looking further ahead, Goldman Sachs expects the easing cycle to extend until 2026, with the federal funds target rate potentially falling to 3% or lower, reflecting a view that inflation will continue to moderate and labor market slack will increase [2] - Schiffman anticipates that as short-term yields decline due to policy easing, long-term yields will be supported by supply dynamics and term premium factors, leading to a steeper yield curve [2] - The combination of declining interest rates and a steepening curve suggests a weaker medium-term outlook for the dollar, especially if labor data confirms the Fed's growing concerns [2]