When Will FED Start Interest Rate Cuts? Goldman Sachs Announces Its Estimates!

While Bitcoin started the new week with a sudden correction, BTC and altcoins also entered an important week when the FED will announce its final interest rate decision for this year.

As it is known, the FED, which announced its interest rate decision on the first day of November, kept interest rates constant in line with expectations.

While expectations are focused on keeping interest rates constant in December, the probability of no interest rate increase in December is priced at 98.4%, according to CME Group’s FED Watch tool.

At this point, it is more important when the FED will start reducing interest rates for Bitcoin and cryptocurrencies.

According to Reuters, banking giant Goldman Sachs thinks that the FED will make its first interest rate cut in the third quarter of 2024.

The giant bank, which had previously predicted that the FED would make its first interest rate cut in the fourth quarter of 2024, brought this forecast forward and also stated that the FED would make two interest rate cuts in 2024.

Goldman Sachs economist Jan Hatzius said in a recent note:

“Healthy growth and labor market data bode well. However, better inflation news indicates that normalization cuts may come a little earlier.

“Our inflation forecast is slightly lower, but members of the FOMC (Federal Open Market Committee) will probably choose to be less optimistic about inflation.”

As you may remember, the FED initiated the tightening cycle and interest rate increases in March 2022 to restrain rising inflation. At this point, the last increase occurred in July.

Bitcoin hit its peak of $69,000 in November 2021, when the FED started increasing interest rates. Since the subsequent bear market is directly related to the FED’s interest rate increases, it is thought that BTC may return to its old days after a policy change and the start of interest rate cuts.

*This is not investment advice.