Goldman Sachs expects the Federal Reserve to begin cutting interest rates in September 2025. This is linked to softening inflation trends, with analysts forecasting three quarter-point cuts by the end of the year.
Goldman Sachs Rate Cut Forecast
Goldman Sachs projects that the Fed may initiate interest rate cuts starting in September 2025. This forecast is driven by ongoing declining inflation and potential shifts in monetary policy. Expectations include three quarter-point reductions before year’s end, setting the terminal range at 3.00% to 3.25%.
QUOTE: Jan Hatzius, Chief Economist, Goldman Sachs: "Goldman Sachs now expects the Fed to begin rate cuts in September 2025, projecting three quarter-point cuts across the remainder of the year, which would set the terminal rate forecast at 3.00-3.25%."
Market Reaction to Expected Rate Cuts
Reactions in the market remain mixed. While significant statements from the Fed or notable figures like Arthur Hayes and Vitalik Buterin are pending, historical precedents suggest that rate cuts often inspire optimism. While sentiment is cautious, it reflects a potential increase in valuations of digital assets.
Speculative Opportunities in Cryptocurrency Market
The anticipated rate cuts are likely to drive increased speculative activity, as investors seek higher-yield opportunities in risk assets such as cryptocurrencies. For instance, Bitcoin (BTC) is currently priced at $108,152.28, with a market cap of approximately $2.15 trillion. Trading volumes have surged by 30.49% in the last 24 hours.
Overall, Goldman Sachs' prediction about the Fed's rate cuts in September 2025 could significantly impact both financial and digital markets, opening new avenues for speculative investment.
