• Goldman Sachs lowered the U.S. recession odds to 20%.
  • The investment giant predicts a 25-basis-point rate cut from the U.S. Federal Reserve.

Global investment giant Goldman Sachs Group, Inc. has lowered the probability of the U.S. entering a recession next year to 20% from its previous estimate of 25%. 

The firm has expressed increased confidence that the U.S. Federal Reserve will reduce interest rates by 25 basis points at its September policy meeting. Further added, “another downside jobs surprise on September 6 could still trigger a 50 bps move.” 

Previously in early August, Goldman Sachs economists raised their 12-month U.S. recession probability from 15% to 25% after the figures of U.S. July jobs reports revealed. If the August jobs report seems “reasonably good,” they would probably cut the recession probability back to 15%.

Furthermore, the investment giant’s  chief U.S. economist Jan Hatzius noted, “Continued expansion would make the U.S. look more similar to other G10 economies, where the Sahm rule has held less than 70% of the time.”

Recently, Goldman Sachs revealed its holding of $418 million in Bitcoin exchange-traded funds (ETFs) in the second quarter in a Form 13F filing. Its largest BTC ETF position is in BlackRock’s Ishares Bitcoin Trust (IBIT), a 7 million share, or $238 million stake. 

For Bitcoin (BTC), the Fed’s lower interest rates weaken the dollar. On the other hand, if the rate cut is seen as a growing fear of an impending recession, it might lead to a more cautious market environment. 

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