Back to the Blog Main Page
11/09/25
91
Goldman Sachs Boss Counters Fed Rate Cut Expectations
Goldman Sachs CEO David Solomon has dismissed expectations that the Federal Reserve will implement a 50 basis point cut in interest rates in September. This stance contrasts with recent forecasts from Standard Chartered Bank, which increased its prediction to such a significant reduction, citing August’s weaker-than-expected employment figures as a contributing factor.
Market expectations, as reflected by the CME FedWatch Tool, indicate a low probability — around 7.8% — of a 50 basis point reduction at the upcoming Federal Reserve meeting scheduled for September 17. Conversely, the majority of market participants anticipate a more modest 25 basis point decrease. Such a move aligns with the broader consensus, which sees a 92.2% likelihood of a smaller rate cut, emphasizing cautious optimism rather than aggressive easing.
The economic outlook continues to evolve amid signs of labor market softening, which influences expectations for monetary policy. While the employment data suggests some cooling, officials are considering multiple rate adjustments for the remainder of the year. The Federal Reserve might execute one or two additional rate cuts, contingent upon future macroeconomic developments, particularly inflation and employment trends.
The implications of the Fed’s policy stance extend beyond traditional markets into the cryptocurrency space. Lower interest rates tend to diminish the appeal of fixed-income investments like bonds, leading investors to seek higher returns in alternative assets such as cryptocurrencies. Nonetheless, recent social media activity around the potential rate cuts has raised concerns among analysts. A significant surge in discussion and bullish sentiment could signal an overly euphoric market, potentially foreshadowing a near-term correction or local top.
Other financial institutions, including Bank of America, have revised their forecasts to acknowledge the possibility of rate cuts in late 2023. These adjustments align with signals from Federal Reserve officials, including Chair Jerome Powell, who previously suggested that a rate reduction could occur as early as September, depending on upcoming economic data.
Promotions
