Goldman Sachs Finds Market Too Hawkish: 31% Probability Seen for September Rate Hike

While Goldman Sachs views a Fed rate hike in September as a very low probability, Bitcoin maintains its movement within the $62,000-$66,000 range.

Goldman Sachs Chief Economist Jan Hatzius stated that the probability of the U.S. Federal Reserve raising interest rates at its September meeting is “very low” following recent economic data. This assessment comes amidst the narrow price range Bitcoin has been trading in for over a month.

In a note to clients, Hatzius cited soft retail sales, weakening employment data, and slowing inflation. The chief economist noted that, in line with current economic forecasts, inflation is more likely to decline further rather than rise again as the year progresses, stating that “market pricing remains too hawkish.”

CME FedWatch measures the probability of a rate hike at 30.6 percent

There is a notable discrepancy between Goldman Sachs’ assessment and the expectations of the futures market. According to CME FedWatch data, investors see only a 30.6% probability of the Fed raising its benchmark interest rate by 25 basis points to the 3.75-4% range. The majority of the market expects rates to be left at their current level.

At the time of writing, Bitcoin is trading at approximately $63,500, up about 1% since the start of the day. The price has primarily remained within the $62,000-$66,000 range since the beginning of July.

Interest rate hikes typically put pressure on risky assets like Bitcoin as they make access to credit and market liquidity more difficult. However, Goldman Sachs’ view does not represent a realized Fed decision or a definitive price signal. Therefore, investors continue to monitor new economic data and whether Bitcoin can break out of its current range.