Goldman Sachs: Fed Expected to Cut Rates by 25 Basis Points in September, Five-Year Treasury Notes are the Best Trade Before Rate Cut

By: theblockbeats.news|2025/08/19 10:02:07
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BlockBeats News, August 19th, Goldman Sachs' Global Head of Banking and Markets Strategy, Shifrin, stated that amid the Federal Reserve's possible rate cut, the five-year U.S. Treasury bond is currently the most attractive trading option. He pointed out that the 3%-4% range of the five-year bond yield is an investment-worthy level that can also provide protection during times of rising market risk.

The current yield on the five-year U.S. Treasury bond is 3.85%, significantly lower than the 4.38% at the beginning of the year. A Reuters survey shows that 61% of economists expect the Fed to cut the benchmark interest rate by 25 basis points to the 4%-4.25% range at the September meeting.

Goldman Sachs predicts that considering the slowdown in real GDP growth and the rise in unemployment rate, the Fed may start a rate cut cycle in the fourth quarter of 2025 and continue with accommodative policies in 2026, ultimately adjusting the policy rate to the 3%-3.25% level. (FXStreet)

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