Goldman pivots, now forecasts Fed hike in October
Goldman Sachs has updated its forecast to include a potential Federal Reserve interest rate hike in October following hawkish comments from Fed Chair Kevin Warsh. Meanwhile, the cryptocurrency market remains relatively stable despite ongoing regulatory and industry-specific news.
Why it matters
Shifting interest rate expectations significantly impact global financial markets and investor sentiment toward risk assets like Bitcoin.
The shift comes after the Fed on Wednesday lifted rates by 25 basis points to a 3.75%–4.00% target range. The central bank’s updated rate projections revealed a strong majority of policymakers expecting at least one more increase this year.
At the post-meeting press conference, Fed Chair Kevin Warsh struck a hawkish tone, saying inflation remains “too high” and that the latest hike merely removed a “dose of accommodation,” implying policy is still not restrictive enough and more rate hikes may be in the pipeline.
As of this writing, traders are pricing just over 50% chance of another 25 basis points hike in October, according to the CME’s FedWatch tool.
Bitcoin continues to trade near $76,260, up just 0.5% on a 24 hour basis.
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