Most investors are expecting the US Federal Reserve to cut interest rates by around 50 basis points (bps) this year, according to a new survey.
Out of the nearly 680 investors polled in early January by Goldman Sachs, more than half said they are anticipating the Fed funds to be 3.75% or higher at the end of this year, implying reductions of about 50 bps for 2025.
More than a third (35%) said they expect the rates to be 3.75% to 4% at the end of 2025, while 29% are betting on a target range of 3.5% and 3.75%.
Last month, the Federal Open Market Committee (FOMC) trimmed the key interest rate by a quarter percentage point to a range of 4.25% to 4.5%. Goldman Sachs Research expects two further reductions this year.
Goldman Sachs’ survey also found that there are fewer investors that are upbeat this year amid growing concerns about inflation.
In the latest poll, 42% of the investors described themselves as bullish or slightly bullish, down from 60% in December and 67% in November
“This could be partly attributed to the change in tone at the December FOMC, with less easing expected and more caution around inflation,” said Oscar Ostlund, Goldman Sachs’ global head of content strategy, market analytics and data science.
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