Major investment banking firm Goldman Sachs has announced that it will bring forward the expected rate cut by the US Federal Reserve (Fed) from the fourth quarter of 2024 to the third quarter of 2024.

This shift is due to Bitcoin (BTC) and the broader crypto asset (virtual currency) market becoming more volatile due to the anticipated launch of a spot exchange-traded fund (ETF) in the US, the impending halving of Bitcoin mining rewards, and the so-called risk-free This is due to a bullish cocktail of falling 10-year Treasury yields, which have soared in recent weeks.

The Fed’s base rate is currently between 5.25% and 5.5%, and traders in federal funds rate futures expect it to fall to the 4% range by the end of next year.

When interest rates fall, borrowing costs become cheaper, spurring risk-taking in the economy and financial markets, including crypto assets. The opposite happens when interest rates spike, as we observed in 2022.

The Fed began its tightening cycle in March 2022 to curb inflation, raising interest rates from low levels of 0% to 0.25%, with the most recent increase occurring in July. A sharp rise in borrowing costs weighed on risk assets, including crypto assets, last year.

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: Jesse Hamilton/CoinDesk
｜Original: Goldman Sachs Sees Fed Delivering First Rate Cut in Q3 2024: Reuters