Goldman Sachs has revised its forecast for Federal Reserve interest rate cuts, now predicting they will begin in September 2025. This news could significantly impact global financial markets, including cryptocurrencies.
Goldman Sachs Forecast
Goldman Sachs has adjusted its rate cut forecast, now anticipating the Federal Reserve to begin reducing rates in September 2025, having initially expected this in December. The forecast includes three 25-basis-point cuts in 2025. The bank's analysts attribute this revision to adjusted inflation expectations due to milder tariff impacts.
Federal Reserve Officials' Insights
Federal Reserve officials, including Jerome Powell, emphasize a cautious approach to rate adjustments. Powell has expressed ongoing concerns about inflation, while Raphael Bostic from Atlanta anticipates only one cut in 2024. Such revisions reflect evolving economic conditions and policy assessments.
Impact on Cryptocurrency
Goldman Sachs identifies potential benefits for cryptocurrencies, such as BTC and ETH, due to improved dollar liquidity. Historically, interest rate cuts have led to heightened activity in risk assets, correlating with increased movements in the crypto market and heightened total value locked in DeFi platforms.
Financial markets will closely observe shifts in regulatory frameworks and monetary policies as 2025 approaches, as Federal Reserve actions regarding inflation and liquidity will likely have significant implications for both traditional and emerging financial sectors.
