Goldman Sachs Predicts Fed Will Cut Rates by 75 Basis Points in 2025

Goldman Sachs Predicts Fed Will Cut Rates by 75 Basis Points in 2025Goldman Sachs economists project that the Federal Reserve will reduce interest rates by 75 basis points this year, revising their earlier forecast of a 100-basis-point cut, according to Jinshi Data. This outlook is more dovish than current market pricing and reflects expectations of a continued downward trend in core inflation.Key Insights:Revised Projections: Goldman Sachs scaled down its interest rate cut expectations from 100 basis points to 75 basis points.Inflation Outlook: The bank cites a declining potential inflation rate as a key factor behind the more conservative forecast.Impact of Trump Administration Policies: Economists express doubt that policy shifts under the new administration will lead to significant upward pressure on interest rates.Market Implications:The expectation of reduced rate cuts aligns with a cautious approach from the Federal Reserve, balancing inflation control with the broader economic outlook. This dovish stance could provide a supportive environment for equities and alternative assets like cryptocurrencies, which tend to benefit from a lower-rate environment.Investors will be closely watching upcoming Federal Open Market Committee (FOMC) meetings for signals on monetary policy adjustments amid evolving economic conditions.