Goldman Sachs predicts three Fed interest rate cuts in 2025 due to weak job growth in the US.
Goldman Sachs' Rate Cut Forecast
Goldman Sachs has forecasted three Federal Reserve interest rate cuts in 2025 based on weak US employment data. The cuts are expected in September, October, and December. According to Goldman Sachs Chief Economist Jan Hatzius, "We now see three 25 basis-point cuts in September, October and December. This would take the Fed funds rate to a range of 3.50% to 3.75%."
Labor Market and Its Impact on Rates
The forecast is grounded in current US job market conditions. Recent data indicates employment growth slowed to about 30,000 jobs per month, while compensatory hiring—a crucial growth driver—shows signs of fading. Despite a stable unemployment rate, Goldman Sachs warns that a mild labor market slowdown can still prompt future rate cuts.
Bitcoin's Prospects Amid Rate Cuts
The anticipated Fed rate cuts may positively impact the cryptocurrency market by encouraging increased interest in riskier assets such as Bitcoin and other digital currencies. Historically, lower interest rates have boosted demand for high-volatility assets. Currently, Bitcoin is priced at $115,162.04, with a market cap of $2.29 trillion.
Expected Fed rate cuts in 2025 could significantly influence the cryptocurrency market, increasing interest in risk assets.
