Goldman Sachs: Markets Overestimate Interest Rate and Oil Price Shocks on US Economy

Goldman Sachs Group has maintained its forecast for U.S. GDP growth in 2026 at 2.2%, which is only 0.3 percentage points lower than its early-year projection.

The investment bank believes that markets have overestimated the drag on the U.S. economy from rising interest rates and higher oil prices, with a net change in financial conditions being minimal.

Rising stock prices, narrowing credit spreads, and a weaker U.S. dollar have almost entirely offset the impact of higher interest rates, resulting in a net drag of just 0.1 percentage point on 2026 GDP.

GDP growth is projected at 3.4% in Q3, with full-year growth at 2.2%, close to the potential growth rate of 2.3%. The oil price shock drags down growth by 0.3 percentage points, primarily through the consumption channel.