Goldman Sachs CEO David Solomon dismissed the idea that the US Federal Reserve will deliver a 50-basis-point rate cut in September, countering Standard Chartered Bank’s recent bold prediction.
“I don’t think that’s probably on the cards,” Solomon told CNBC on Wednesday when asked about the possibility of such a move.
Market data supports his view: the CME FedWatch Tool shows only 7.8% of traders expect a half-point cut at the Sept. 17 Fed meeting. Standard Chartered, however, upped its forecast to that level earlier this week, citing August’s weaker-than-expected jobs report, according to Reuters.
On social media, some speculated about the potential market impact. “If that happens, crypto will explode through previous ATHs,” trader Mister Crypto wrote on X.
Solomon, by contrast, expects the Fed to align with the prevailing consensus, where 92.2% of market participants see a smaller adjustment. “I’m pretty confident we’ll have a 25-basis-point rate cut,” he said.
He also noted signs of “softening” in the labor market, adding that economic conditions could justify additional moves. “I think you could see one or two other cuts, depending on how economic conditions play out from here,” Solomon said.
This month’s Fed rate cut decision carries weight not only for traditional markets but also for crypto, as lower interest rates reduce the appeal of safer assets like bonds compared to riskier, higher-yielding investments.
Still, sentiment analysis firm Santiment has cautioned that the surge in online chatter surrounding the upcoming September Fed meeting could spell trouble for crypto.
Crypto may have already priced in a cut
“Historically, when discussion around a single bullish narrative spikes this sharply, it can signal excessive euphoria and a potential local top,” Santiment noted on Aug. 24.
Standard Chartered isn’t alone in revising expectations. Bank of America recently abandoned its long-standing view that there would be no rate cuts in 2025. Analysts now anticipate two 25-basis-point reductions—one in September and another in December—Bloomberg reported.
The shift comes after Fed Chair Jerome Powell signaled a possible September cut during his keynote at the Jackson Hole Economic Symposium in Wyoming on Aug. 22.
