Goldman Sachs Predicts When Interest Rate Cut Will Happen in the U.S.

  • Goldman Sachs economists have updated their predictions on when the Federal Reserve will cut interest rates.
  • Federal Reserve officials, including Gov. Christopher Waller and Philadelphia Fed President Patrick Harker, hinted that there is no immediate need to cut interest rates.
  • Market forecasts based on futures market pricing indicate a 20% probability of an interest rate cut in May and a 70% probability in June.

The economists at the banking giant Goldman Sachs have disclosed their predictions on when the U.S. Federal Reserve will make interest rate cuts.

Goldman Sachs Reveals Interest Rate Predictions

Goldman Sachs
Goldman Sachs

Goldman Sachs economists have updated their predictions on when the Federal Reserve will cut interest rates. Initially, they expected five rate cuts in 2024, but they have reduced it to four cuts and anticipate the first cut to happen in June, earlier than previously expected. This change came after considering the comments of Federal Reserve officials and the latest minutes from policy meetings.

Federal Reserve officials, including Gov. Christopher Waller and Philadelphia Fed President Patrick Harker, hinted that there is no immediate need to cut interest rates. They want to see more progress in reducing inflation before taking any steps. Their comments indicate that the Fed is not in a rush to cut rates, especially with only a few inflation reports available before their next meeting in May.

Fed officials are currently focusing on two key changes in their approach. First, they noticed a reduced concern about the negative effects of persistently high interest rates. They believe that most of the main risks from previous rate hikes are behind them, reducing the urgency for interest rate cuts.

Second, before considering rate cuts, they want clearer evidence that inflation is approaching the 2% target. This marks a change from the previous stance, indicating a shift in thinking that rate cuts could happen “well before” inflation reaches the 2% level.

Despite considering January inflation data as an exception, Goldman Sachs predicts that core inflation will drop to 2.5% by the Federal Open Market Committee meeting in May and decrease to 2.2% in June.

Four Interest Rate Cuts in 2Q 2024

According to these predictions, Goldman Sachs expects interest rate cuts in June, July, September, and December of 2024 and revises it to four cuts in 2025 from three. This shows that there is no change in their terminal rate views, remaining between 3.25% and 3.5%. Similarly, UBS revised its forecast and expects a total of 75 basis points in interest rate cuts starting in June this year.

Market forecasts based on futures market pricing indicate a 20% probability of an interest rate cut in May and a 70% probability in June. The Federal Reserve’s cautious approach indicates prioritizing the fight against inflation and economic stability before making any interest rate cuts.

Despite the potential delay in interest rate cuts, Bitcoin’s potential bullish note after possible rate cuts in 2024, following the Bitcoin Halving, could be significant. With the Halving expected to push the Bitcoin price above $69,000, interest rate cuts after April could propel the Bitcoin price to new highs.

In the ongoing recovery process, the BTC price is trading above $50,000, just 26% away from its all-time high. Therefore, despite the potential delay in interest rate cuts, the coming months could be hopeful for Bitcoin and the crypto industry.

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news.
spot_imgspot_imgspot_imgspot_img

Latest News

Bitcoin (BTC) Drops Against Gold: Peter Schiff Predicts Bear Market, But Is It Too Soon?

Bitcoin has experienced volatility, with famed gold proponent Peter Schiff declaring a bear market based on its performance against gold. However, technical indicators and the broader market suggest a more complex picture. Discover what's next for BTC.

Meme Coin Mania: Solana vs. Ethereum – Which Blockchain Will Win?

Meme coins are the talk of the crypto world. But which blockchain is the ultimate meme battleground – Solana or Ethereum? Explore the reasons behind the hype, the top contenders on both networks, and the risks to consider before diving into this trend.

ENA Coin Price Analysis: Potential Gains and Risks Ahead

ENA Coin exhibits promising price movements, with recent gains reaching 18%. However, investors should remain vigilant and adhere to risk management strategies. Discover potential entry and exit points in this comprehensive ENA Coin analysis.

Bitcoin (BTC), Ethereum (ETH) Prices Drop Amid Middle East Conflict: Will They Recover?

Bitcoin and Ethereum experienced significant volatility following an escalation in the Iran-Israel conflict. Explore expert analysis on potential price trajectories and whether a full recovery is imminent.

Bitcoin (BTC) Price Tanks After Middle East Tensions: Novogratz Predicts Recovery

Bitcoin's price experienced a sharp decline following Middle East tensions, but Galaxy Digital CEO Mike Novogratz maintains optimism. Discover why he believes the cryptocurrency will recover and explore his bullish predictions.
spot_imgspot_imgspot_imgspot_img

PRO Analysis

ENA Coin Price Analysis: Potential Gains and Risks Ahead

ENA Coin exhibits promising price movements, with recent gains reaching 18%. However, investors should remain vigilant and adhere to risk management strategies. Discover potential entry and exit points in this comprehensive ENA Coin analysis.

ENA Coin Price Analysis: Can It Break Out or Face Further Decline?

Dive into ENA Coin's technical analysis to gain insights into potential price movements, long-term investment opportunities, and key support and resistance levels.

Bitcoin Could Start Its Rise to $75K Now! Current BTC Analysis

BTC's downtrend continued into the green zone as the move predicted in the "Will it start falling until the halving?" analysis materialized, with yesterday's analysis showing a gain of more than 15%; currently, the price is trying to rally with buying from the green support range of $66,666 - $65,800.

Bitcoin BTC’s Path to Recovery: Will the Upcoming Halving Trigger a Rise Above $71,400?

This analysis delves into Bitcoin's immediate future as it approaches a critical halving event, exploring potential movements above key resistance levels.

Bitcoin (BTC) Surges Past $70k: Could $75k be the Next Target?

Bitcoin (BTC) has made a decisive move above $70,000, indicating bullish momentum. This article delves into the factors driving the surge, technical analysis, and what investors should watch for in the near term.
Marisol Navaro
Marisol Navarohttps://en.coinotag.com/
Marisol Navaro is a young 21-year-old writer who is passionate about following in Satoshi's footsteps in the cryptocurrency industry. With a drive to learn and understand the latest trends and developments, Marisol provides fresh insights and perspectives on the world of cryptocurrency.
spot_imgspot_imgspot_imgspot_img

Bitcoin (BTC) Drops Against Gold: Peter Schiff Predicts Bear Market, But Is It Too Soon?

Bitcoin has experienced volatility, with famed gold proponent Peter Schiff declaring a bear market based on its performance against gold. However, technical indicators and the broader market suggest a more complex picture. Discover what's next for BTC.

Meme Coin Mania: Solana vs. Ethereum – Which Blockchain Will Win?

Meme coins are the talk of the crypto world. But which blockchain is the ultimate meme battleground – Solana or Ethereum? Explore the reasons behind the hype, the top contenders on both networks, and the risks to consider before diving into this trend.

ENA Coin Price Analysis: Potential Gains and Risks Ahead

ENA Coin exhibits promising price movements, with recent gains reaching 18%. However, investors should remain vigilant and adhere to risk management strategies. Discover potential entry and exit points in this comprehensive ENA Coin analysis.