Goldman Sachs Asset Management's Rosner Outlines Fed Expectations, Growth and Geopolitical Risks

Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, used a March 18 appearance on CNBC's Squawk Box to reaffirm the firm's base case of two Federal Reserve rate cuts in 2026, with the next reduction expected in June, while maintaining that above-trend growth remains achievable despite a thicket of geopolitical and policy risks.

Rosner pointed to January CPI data as "not as strong as feared," a reading she said helped clarify the Fed's path toward policy normalization. But she was careful not to declare the inflation fight over. The Fed and the Federal Open Market Committee, she noted, remain particularly sensitive to labor market signals, and any meaningful softening in employment conditions could scramble the rate-cut timeline. "If the labor market continues to show improvement, the normalization path becomes clearer," she said.

The Squawk Box segment, which aired at 7:11 a.m. EDT, also covered what to expect from Fed Chair Jerome Powell that day and the market impact of the ongoing Iran war, topics that have added a layer of uncertainty to an already complicated macro picture for fixed-income investors.

Rosner's market positioning, detailed in Goldman Sachs Asset Management's 2025 Outlook report, leans into securitized credit. "Robust performance in securitized credit, characterized by spread tightening across collateral types and the capital structure, should continue into 2025," she wrote in that report. "CMBS is most compelling, with spreads in AAA- and BBB-rated securities appearing attractive relative to fair value assessments. Investment grade bonds also stand out as an option for enhancing returns, striking a balance between earning income and managing risk."

On strategy, Rosner favored flexibility over rigidity. "Dynamic investment strategies can strategically complement core bond allocations in 2025 across different interest rate markets," she wrote. "We favor agile strategies with seamless sector, geographical, and issuer rotation in response to market opportunities."

The broader risk framework from the GSAM outlook, contributed by co-author Alexandra Wilson-Elizondo, acknowledged that the firm's cautious optimism carries real tail risks. "Unexpected increases in inflation from potential tariffs, as well as looser fiscal conditions, could prompt the Fed to pause rate cuts," Wilson-Elizondo wrote, a warning that lands with particular force given ongoing congressional debates over spending and the trade policy environment.

For Goldman's fixed-income desk and its clients, the calculus is straightforward but delicate: two cuts priced in, June as the trigger date, and labor data as the swing factor. GSAM oversees approximately $3.1 trillion in assets under supervision, a scale that means Rosner's sector calls on CMBS spreads and investment-grade positioning are not academic. If the June cut slips, or if geopolitical shocks push risk premiums wider than current spread levels reflect, the agile rotation she advocates will be put to a genuine test.