Goldman Sachs analysts see U.S. economic growth accelerating in 2026, with GDP forecasted at 2.5% on a fourth-quarter-to-fourth-quarter basis and 2.8% annually. That's above consensus estimates of 2.1%. The bank attributes this optimism to fading tariff drag and stimulative tax cuts.

Inflation is also expected to ease, with the core PCE price index falling to 2.1% by year-end and underlying consumer prices dropping to 2.0%. These figures align closely with the Fed's 2% target, potentially paving the way for further interest rate cuts. Goldman now sees a 20% chance of a 12-month recession, down from 30%.

The firm forecasts two 25-basis point rate reductions in June and September, pushing the federal funds rate to 3.00%-3.25%. Despite solid growth projections, labor market risks remain. Job openings have been trending lower while companies discuss layoffs and AI-driven cost reductions.

The unemployment rate is projected to hold steady at 4.5%, though recent data shows hiring remains cautious.