tl;dr
Goldman Sachs CEO David Solomon dismisses a 50-basis-point Fed rate cut forecast for September, favoring a smaller cut instead. Standard Chartered Bank predicts the larger cut, citing weak labor market data. Crypto traders anticipate a potential surge if the Fed acts aggressively, but Santiment wa...
**Goldman Sachs CEO Dismisses 50-Basis-Point Fed Rate Cut Forecast, Crypto Eyes a Wild Ride**
Goldman Sachs CEO David Solomon has firmly rejected the idea that the Federal Reserve will slash rates by 50 basis points in September, despite Standard Chartered Bank’s bold prediction. “I don’t think that’s probably on the cards,” Solomon told CNBC, aligning with the broader market consensus that a smaller cut is more likely.
The debate comes as the Fed’s Sept. 17 meeting looms, with CME FedWatch Tool data showing just 7.8% of traders expect the aggressive 50-basis-point move. Standard Chartered, however, recently raised its forecast to that level, citing August’s disappointing jobs report, which hinted at a cooling labor market.
Crypto traders are watching closely. Mister Crypto, a well-known crypto influencer, claimed on X: “If that happens, crypto will explode through previous ATHs.” But Solomon, who sees a “softening” labor market, anticipates a more measured approach. “I’m pretty confident we’ll have a 25 basis point cut,” he said, adding that the Fed could deliver one or two more cuts this year, depending on economic conditions.
The stakes are high. Lower rates typically favor riskier assets like crypto, which could see a surge if the Fed acts aggressively. Yet, sentiment platform Santiment has raised a red flag: a spike in social media chatter about the Fed’s decision might signal overhyped euphoria, potentially foreshadowing a market peak.
Solomon isn’t alone in his cautious outlook. Bank of America recently reversed its stance, now projecting two 25-basis-point cuts in 2025—aligning with Standard Chartered’s revised forecast. Even Fed Chair Jerome Powell hinted at a September cut during his Jackson Hole speech, though he stopped short of confirming specifics.
As the Fed’s decision nears, the clash between dovish and hawkish forecasts underscores the uncertainty facing markets. For crypto, the outcome could be a game-changer—or a warning sign. One thing is clear: the September meeting isn’t just about rates. It’s a litmus test for the economy—and the next chapter for digital assets.
What do you think? Will the Fed’s move unlock crypto’s next bull run, or is the market already pricing in too much optimism?