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

Odaily Odaily News Bitcoin started the new week poorly, and major investment banks reassessed their expectations for the Fed's rate cuts after Friday's strong jobs report. In traditional markets, futures prices tied to the S&P 500 fell 0.3%, extending Friday's 1.5% drop, with the S&P 500 falling to its lowest level since early November 2024. The U.S. dollar index (DXY) approached 110 for the first time since the end of 2022, with rising U.S. Treasury yields supporting its further gains. This prompted Goldman Sachs to postpone 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 before), and cut rates again in June 2026," Goldman Sachs said in an economic research report on January 10. Although Goldman Sachs and JPMorgan Chase still expect rate cuts, Bank of America's expectations are more aggressive, leaning towards rate hikes or re-tightening policy. 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)