Goldman Sachs: Expects the Federal Reserve to cut interest rates by 25 basis points in September, with five-year U.S. Treasuries being the best trade choice before the rate cut

ChainCatcher news, Goldman Sachs' Chief Strategist for Global Banking and Markets, Sheffrin, stated that in the context of potential interest rate cuts by the Federal Reserve, the five-year U.S. Treasury bond is currently the most attractive trading option. He pointed out that the yield on five-year Treasury bonds has investment value in the range of 3%-4%, while also providing protection during times of increased market risk. The current yield on five-year U.S. Treasury bonds is 3.85%, significantly down from 4.38% at the beginning of the year.

A Reuters survey shows that 61% of economists expect the Federal Reserve to lower the benchmark interest rate by 25 basis points to the 4%-4.25% range at the September meeting. Goldman Sachs expects that, considering the slowdown in real GDP growth and rising unemployment rates, the Federal Reserve may initiate a rate-cutting cycle in the fourth quarter of 2025 and continue to implement easing policies in 2026, ultimately adjusting the policy rate to a level of 3%-3.25%. (Jin Shi)