Goldman Sachs: Fed Expected to Cut Rates by 25 Basis Points in September, Five-Year Treasury Notes are the Best Trade Before Rate Cut
BlockBeats News, August 19th, Goldman Sachs' Global Head of Banking and Markets Strategy, Shifrin, stated that amid the Federal Reserve's possible rate cut, the five-year U.S. Treasury bond is currently the most attractive trading option. He pointed out that the 3%-4% range of the five-year bond yield is an investment-worthy level that can also provide protection during times of rising market risk.
The current yield on the five-year U.S. Treasury bond is 3.85%, significantly lower than the 4.38% at the beginning of the year. A Reuters survey shows that 61% of economists expect the Fed to cut the benchmark interest rate by 25 basis points to the 4%-4.25% range at the September meeting.
Goldman Sachs predicts that considering the slowdown in real GDP growth and the rise in unemployment rate, the Fed may start a rate cut cycle in the fourth quarter of 2025 and continue with accommodative policies in 2026, ultimately adjusting the policy rate to the 3%-3.25% level. (FXStreet)
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