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Goldman Sachs Predicts Fed to Cut Rates Three Times in 2025 and Twice in 2026
ByAinvest
Wednesday, Aug 13, 2025 5:05 pm ET1min read
Goldman Sachs expects the US Federal Reserve to cut interest rates three times in late 2025 and twice more in 2026. The forecast is based on Goldman's analysis of economic indicators and the Fed's stance on monetary policy. The predicted rate cuts are aimed at boosting economic growth and mitigating inflationary pressures.
Goldman Sachs has released a significant forecast, predicting that the U.S. Federal Reserve will cut interest rates three times in late 2025 and twice more in 2026. This forecast is based on the investment bank's analysis of economic indicators and the Fed's stance on monetary policy. The predicted rate cuts aim to boost economic growth and mitigate inflationary pressures [1].The Federal Reserve has been increasingly considering potential interest rate cuts as signs of a cooling economy become more pronounced. Minneapolis Fed President Neel Kashkari has been among the most vocal figures highlighting the need for policy adjustments, suggesting that two rate cuts by the end of the year could be appropriate amid a slowdown in economic growth [2]. Kashkari emphasized that while rate cuts could support economic growth, the Federal Reserve remains alert to potential inflationary pressures from tariffs [3].
Goldman Sachs has gone a step further, forecasting up to five rate cuts by mid-2026 if the current economic trajectory continues. This prediction is based on the firm’s assessment of weak employment trends and a broader economic slowdown that could pressure the Fed into action [4]. However, Kashkari has also noted that any rate cuts would depend on continued progress in bringing down inflation, which remains a key policy objective [5].
Market expectations have already begun to shift in response to Kashkari’s comments and similar statements from other Fed officials. The probability of a rate cut at the September meeting has increased, with investors and analysts closely watching for further guidance [6]. The focus is likely to remain on balancing the risks of inflation with the need to support employment and economic growth [7].
These predicted rate cuts could also impact cryptocurrency markets, with crypto assets historically responding positively to dovish Federal Reserve pivots, affecting Bitcoin, Ethereum, and DeFi tokens [8]. Bitcoin, trading at $114,571.19, has seen recent fluctuations and a 11.62% increase over the past 90 days, reflecting ongoing adjustments in response to Federal Reserve policies [9].
The approach could also impact consumer-driven sectors, with tariffs shifting $28B/month revenue to Treasury but burdening consumers with 67% of costs by 2025, threatening inflation and economic stability [10]. The recent feud between U.S. President Donald Trump and Goldman Sachs CEO David Solomon has escalated beyond a mere spat into a symbolic battle over the future of economic policy and investor confidence [11].
References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_FWN3U3230:0-goldman-sachs-maintains-ttf-gas-price-forecast-for-2025-2026/
[2] https://www.ainvest.com/news/bitcoin-news-today-fed-officials-signal-rate-cuts-economy-slows-crypto-markets-react-2508/
[3] https://www.ainvest.com/news/bitcoin-news-today-fed-officials-signal-rate-cuts-economy-slows-crypto-markets-react-2508/
[4] https://www.ainvest.com/news/bitcoin-news-today-fed-officials-signal-rate-cuts-economy-slows-crypto-markets-react-2508/
[5] https://www.ainvest.com/news/bitcoin-news-today-fed-officials-signal-rate-cuts-economy-slows-crypto-markets-react-2508/
[6] https://www.ainvest.com/news/bitcoin-news-today-fed-officials-signal-rate-cuts-economy-slows-crypto-markets-react-2508/
[7] https://www.ainvest.com/news/bitcoin-news-today-fed-officials-signal-rate-cuts-economy-slows-crypto-markets-react-2508/
[8] https://www.ainvest.com/news/bitcoin-news-today-fed-officials-signal-rate-cuts-economy-slows-crypto-markets-react-2508/
[9] https://www.ainvest.com/news/bitcoin-news-today-fed-officials-signal-rate-cuts-economy-slows-crypto-markets-react-2508/
[10] https://www.ainvest.com/news/trump-tariff-tantrum-goldman-sachs-clash-power-financial-markets-2508/
[11] https://www.ainvest.com/news/trump-tariff-tantrum-goldman-sachs-clash-power-financial-markets-2508/
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