Goldman Sachs has altered its inflation forecast, suggesting that the Fed may cut interest rates three times in 2024. This prediction could affect the crypto market.
Goldman Sachs Inflation Forecasts
According to Wu Blockchain, citing WSJ economist Nick Timiraos, Goldman Sachs has revised its inflation outlook, expecting the core PCE index to rise to 3.5% this year compared to the previous estimate of 3.0%. This change is linked to the expectation of interest rate cuts.
Federal Reserve Decisions
During its March meeting, the Federal Reserve decided to keep benchmark interest rates unchanged but indicated further reductions later this year. Projections for 2025 include another half-percentage point decrease, suggesting two rate cuts this year.
What This Means for Cryptocurrencies
Despite macroeconomic uncertainty, Goldman Sachs’ prediction of three rate cuts could be a positive signal for cryptocurrencies, potentially supporting price gains in the coming months. Historically, rate cuts have boosted risk assets, leading to more capital inflow into the crypto market.
If Goldman Sachs' forecasts hold true, the planned Fed rate cuts could significantly impact the crypto market, encouraging increased investments in this sector.
