When Goldman Sachs executives were asked about disappointing results in the firm’s fixed income division this week, they made it sound as though the trading environment was simply not in their favor.

Fixed income revenue fell 10% in the first quarter, coming in $910 million below analysts’ expectations, according to StreetAccount data. It was an unusually large miss for one of Goldman’s flagship Wall Street businesses.

“It was basically just a function of the overall environment making markets,” CFO Denis Coleman told an analyst on Monday after the bank’s earning report. “We remain actively engaged with clients, but our performance in rates and mortgages was relatively lower.”

But as nearly all of Goldman’s rivals, including JPMorgan Chase, Morgan Stanley and Citigroup, posted blockbuster results for first-quarter fixed income in the days that followed, one thing became clear to Wall Street: Goldman Sachs’ vaunted fixed income traders had underperformed.

JPMorgan saw fixed income trading revenue jump 21% to $7.1 billion, the bank’s second-biggest haul ever. Morgan Stanley, where fixed income is less a priority than equities, posted a 29% jump in the bond business. Citigroup saw bond trading revenue jump 13% to $5.2 billion.

Since before the 2008 financial crisis, when Lloyd Blankfein led Goldman Sachs, the firm’s fixed income division had been the envy of Wall Street. Goldman was known for its trading prowess, a reputation forged in periods of dislocation when its desks generated outsized gains. The bank’s identity as a trader’s firm — one expected to outperform in turbulent times — has endured in the decade-plus since.

That makes the first-quarter stumble particularly notable.

“It seems that something went wrong at Goldman in fixed income,” said veteran Wells Fargo analyst Mike Mayo, who called the bank’s results “worst-in-class.”

“I’d imagine that at Goldman, a fire is being lit under the traders, managers and risk overseers in FICC after such an underperformance,” Mayo said in an interview with CNBC, using an acronym standing for fixed income, currencies and commodities, the formal name for that business.

The prevailing theory is that Goldman was caught offsides on trades tied to interest rates in the first quarter, according to several market participants who asked for anonymity to speak candidly.

That’s because of the positioning that many Wall Street firms had at the start of this year, when markets were expecting the Federal Reserve to cut interest rates at least twice in 2026, these people said.

But after the price of oil surged with the advent of the Iran war, roiling expectations for inflation, the markets began pricing those cuts out, with some investors even bracing for the possibility of rate hikes this year.

Fixed income was the sole blemish on a quarter in which Goldman Sachs exceeded expectations handily, thanks to the firm’s equities traders and investment bankers. Despite the earnings beat, the firm’s shares dropped as much as about 4% on Monday following the report.  

Goldman Sachs declined to comment. But on Monday, CEO David Solomon sought to put the quarter’s performance into context:

“When I look at the scale and the diversity of the business, it’s performing very, very well,” Solomon said during the company’s conference call. “Some quarters, it’s going to be stronger here, stronger there.”