Goldman Sachs lowers its Fed rate cut expectations, and Bank of America aggressively speculates that the rate cut cycle is over

Bitcoin had a bad start to the new week as major investment banks reassessed their expectations for Fed rate cuts following Friday's strong jobs report. In traditional markets, futures tied to the S&P 500 fell 0.3%, extending Friday's 1.5% drop, which saw the S&P 500 fall to its lowest level since early November 2024. The U.S. dollar index (DXY) approached 110 for the first time since late 2022, with rising Treasury yields supporting further gains. This prompted Goldman Sachs to push back its expectations for the next rate cut from March to June. "Our economists now expect the Fed to cut rates only twice in 2025 (June/December vs. March/June/December previously) and cut again in June 2026," Goldman said in a Jan. 10 economic research note. While Goldman and JPMorgan still expect rate cuts, Bank of America's expectations are more aggressive, leaning toward a rate hike or re-tightening. Bank of America analysts said in a report, "We believe that the rate cut cycle is over... Our base case is that the Fed will extend the interest rate unchanged. But we think the risk of the next move is tilted towards a rate hike." (Coindesk)