Goldman cuts its 2025 US bond yield forecast after revising Fed rate expectations

Analysts at Goldman Sachs Group Inc. have lowered their forecasts for US Treasury bond yields due to increasing expectations that the Federal Reserve (Fed) will ease monetary policy sooner than previously anticipated. In a report released yesterday, the bank’s strategists projected that the yields on 2- and 10-year Treasury securities would reach 3.45% and 4.20% by year-end, respectively. Previously, as noted by Bloomberg, they had expected 3.85% and 4.50%.

A week earlier, Goldman Sachs revised its outlook for the Fed’s monetary policy course, prompting the reassessment of US bond yields expectations. Initially, the bank anticipated only one interest rate cut near the end of the year. However, under current conditions, analysts now expect three rate reductions—in September, October, and December.

Goldman Sachs remains concerned about the US labor market. Thursday’s data slightly eased analysts’ fears about a drop in employment but failed to fully dispel doubts about the stability of these figures. Adding to the uncertainty is unpredictable Donald Trump’s policies, complicating yield forecasts.