Goldman Sachs Adjusts Fed Rate Cut Timeline to 2025

Goldman Sachs Adjusts Fed Rate Cut Timeline to 2025

Goldman Sachs has shifted its expectation for the first Federal Reserve rate cut from June to July 2025, according to the latest insights from Chief US Economist Marc Giannoni and his team.

Goldman Sachs’ revision of the Fed rate cut timeline signifies a cautious approach, reflecting ongoing economic evaluations. This change could influence asset allocation strategies across markets.

The adjustment follows recent economic data, with Marc Giannoni and his team citing labor market resilience as a factor. Goldman Sachs, a major financial player, impacts market expectations through such forecasts. According to Marc Giannoni, Chief US Economist at Goldman Sachs, “Following strong non-farm payroll data, we now see a July rate cut as the base case. Additional labor market data and clarity on tariffs and fiscal policy remain key factors.”

The revised timeline affects risk assets, with US equities and crypto majors like BTC and ETH likely experiencing volatility. Institutional risk strategies may shift due to extended higher rates.

Investor caution is evident with potential DeFi liquidity outflows and lower total value locked in protocols. Initial bearish sentiment is reminiscent of past monetary cycles. Goldman Sachs’ change in stance reflects historical patterns where rate cut delays impacted traditional and digital markets. DeFi tokens and interest-rate-sensitive assets might underperform temporarily.

Major cryptocurrencies remain vulnerable to macro influences. With prolonged rate stagnation, digital asset volatility could rise. Stakeholders must adapt to navigate the changing financial landscape.