Goldman Sachs lowers U.S. Treasury yield forecasts due to increased likelihood of early Fed rate cuts

ChainCatcher news, Goldman Sachs has lowered its forecast for U.S. Treasury yields, indicating an increased likelihood that the Federal Reserve will cut rates earlier than previously expected. Strategists, including George Cole, wrote in a report on July 3 that they expect the yields on two-year and ten-year U.S. Treasuries to drop to 3.45% and 4.20%, respectively, down from previous expectations of 3.85% and 4.50% for these benchmark yields by the end of the year.

Prior to this, Goldman Sachs economists revised their expectations for Fed rate cuts within the year. Before the latest predictions from the Goldman Sachs economic team were released, the U.S. reported strong employment data on Thursday, easing pressure on the Fed. However, Goldman Sachs rate strategists were not discouraged, noting that the significant contribution from government hiring and a slight decline in labor force participation weakened the strength of the data.