Goldman Sachs: Predicts The Federal Reserve (FED) will start cutting rates in September, potentially lowering rates three times within the year.

According to a report from Jin10 on July 1, the Goldman Sachs economic research team has updated their expectations for the Federal Reserve's first interest rate cut from December to September. They predict that the Federal Reserve will cut rates three times in September, October, and December 2025, each by 25 basis points. Goldman Sachs Chief Economist Jan Hatzius believes that the probability of a rate cut in September is slightly above 50%, mainly due to the inflation impact from tariffs being weaker than expected and a substantial weakening in the labor market.

At the same time, Goldman Sachs lowered its terminal interest rate expectations for The Federal Reserve (FED) from 3.5%-3.75% to 3%-3.25%. However, the agency emphasized that unless this week's employment data falls far below expectations, there will be no interest rate cut at the July meeting.

In contrast, Morgan Stanley holds a more cautious stance, believing that the likelihood of the Federal Reserve (FED) lowering interest rates in the near term is low, and most Federal Reserve officials still support Powell's cautious attitude.