Under its base case, which assumes the U.S. avoids a recession, the Fed would deliver three consecutive 25 basis point cuts, bringing the federal funds rate down to a range of 3.5%–3.75%.
However, if the economy does fall into recession, Goldman anticipates a more aggressive policy response, with the Fed slashing rates by approximately 200 basis points over the next year.
Factoring in the increased likelihood of a recession, the bank’s weighted forecast now calls for a total of 130 basis points in rate cuts for 2025—up from 105 basis points previously
Goldman Sachs see up to 200bp of Federal Reserve interest over year ahead – here’s how
