Goldman Sachs Dials Back Hike Bets Amid Weaker Economic Data
Goldman Sachs' Jan Hatzius has downgraded the likelihood of a September rate hike from the Federal Reserve, citing weaker retail sales, jobs, and inflation data. This development comes as markets are pricing in a 30.6% chance of a quarter-point hike, with odds of a rate cut at zero.
The CME FedWatch tool shows that the probability of a September hike has fallen to 30.6%, down from 52.2% just one week ago. In contrast, markets now believe there's a 69.4% chance of holding rates steady at 3.50%-3.75%. This shift in expectations may impact Bitcoin's price, which has historically reacted positively to rate holds.
However, not all rate holds have been beneficial for the asset. According to Markus Thielen, macro research analyst, every rate hold this year has been met with further price decline, leaving Bitcoin near $63,000. In contrast, during the 2019 rate-hike pause, Bitcoin returned around 170% from its cycle low.
It's worth noting that Goldman Sachs believes a rate cut in 2026 can likely be expected at the end of the year, in December. This prediction may have implications for Bitcoin's price trajectory, but it remains to be seen how markets will react to this development.