Goldman Sachs CEO David Solomon has shot down the notion that the US Federal Reserve will cut interest rates by 50 basis points in September, just days after Standard Chartered Bank made the aggressive forecast.
“Whether or not we have a 50 basis cut, I don’t think that’s probably on the cards,” Solomon said during an interview with CNBC on Wednesday.
While CME FedWatch Tool data shows just 7.8% of market participants expect such a move at the Sept. 17 Fed meeting, Standard Chartered Bank recently raised its forecast to that level, citing August’s weaker-than-expected jobs report, according to a Reuters report on Monday.
Crypto trader Mister Crypto said in an X post on Wednesday, “If that happens, crypto will explode through previous ATHs.”
However, Solomon expects the Fed to follow the broader market consensus, with 92.2% of participants anticipating a smaller cut. “I’m pretty confident we’ll have a 25 basis rate cut,” Solomon said.
Solomon points to the labor market “softening”
“There’s no question that when you look at the labor market, there’s a little bit of a softening,” he added.
Solomon anticipates potentially two more rate cuts this year, depending on macroeconomic conditions. “I think you could see one or two other cuts, depending on how economic conditions play out from here,” he said.
This month’s Fed rate cut meeting is significant not just for the broader market but also for crypto, as lower interest rates make traditional investments like bonds less lucrative compared to riskier, higher-reward assets.
However, sentiment platform Santiment recently warned that the surge in social media chatter around the highly anticipated September interest rate decision could be a warning sign for crypto.
Crypto market may have priced in the Fed cut
“Historically, such a massive spike in discussion around a single bullish narrative can indicate that euphoria is getting too high and may signal a local top,” Santiment said on Aug. 24.
Related: Bitcoin breaks $114K as cooling US PPI data boosts Fed rate cut bets
Standard Chartered isn’t the only financial institution recently revising its Fed rate cut forecast.
Analysts at Bank of America reversed their long-held stance of no rate cuts in 2025 and are now also projecting two 25 basis point cuts, one in September and another in December, according to Bloomberg.
Fed Chair Jerome Powell signaled a potential rate cut in September during his keynote speech at the Jackson Hole Economic Symposium in Wyoming on Aug. 22.
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