Goldman Sees 70% Odds Fed Holds Rates as Bitcoin Bounces

Odds of a Federal Reserve rate hike this year slipped further Monday after Goldman Sachs said markets remain too hawkish even as inflation continues to cool. The call sent U.S. stock futures and bitcoin higher, with the world’s largest cryptocurrency jumping more than 1% as Treasury yields and the dollar both eased in response.

Goldman Sachs Calls September Hike “Very Unlikely”

Goldman Sachs chief economist Jan Hatzius said a rate increase at the Fed’s September meeting has become “very unlikely,” citing softer retail sales data, disappointing employment numbers, and slowing inflation prints. “Under our baseline economic forecasts, the inflation news is more likely to improve further than to deteriorate anew as the year progresses,” Hatzius wrote in a client note. “We still think market pricing for the funds rate is too hawkish.”

Goldman Sachs expects the Fed to hold its federal funds target range at 3.50% to 3.75% through the remainder of 2026, pushing any rate cuts into 2027. That call breaks with a market that, as recently as a week earlier, had fully priced in a 25-basis-point rate hike by December; those bets have since shifted toward January 2027. As of publication, CME FedWatch data shows roughly 30% odds of a 25-basis-point hike in September, with the probability of a pause climbing to nearly 70%. Goldman sees further room for the market’s remaining hawkish bets to unwind. Separately, prediction markets are leaning toward “No” on whether the Fed raises rates at all in 2026, with Polymarket data showing No bets at 53% against 47% for Yes.

Bitcoin Bounces as Yields and Dollar Slip

Elevated hawkish rate-hike bets had kept long-dated Treasury yields high even as price pressures eased, muting the rally that slowing inflation would typically deliver to risk assets. The 2-year U.S. Treasury yield slipped further to nearly 4.12% Monday, while investors await Wednesday’s FOMC minutes for additional signals on the committee’s internal debate. The 10-year Treasury yield fell to 4.676%, and the U.S. Dollar Index dropped 0.31% to 99.36 on cooling inflation expectations and reduced rate-hike odds.

“After two months of materially softer jobs and inflation data, it’s hard to see any of the doves shifting toward hikes,” Hatzius wrote, referring to the Fed officials who vote on policy this year. His note follows a period of unusual division within the Federal Open Market Committee, which voted 9-3 at its most recent meeting to hold rates steady, with three regional Fed presidents dissenting in favor of a hike, the most hawkish FOMC vote split in years.

• Bitcoin jumped more than 1% to trade at $63,503, with a 24-hour range between $62,666 and $63,641
• Trading volume rose more than 47% over the past 24 hours as the rate repricing drove renewed activity across risk assets

Conclusion

Goldman’s call places the bank firmly at odds with a market that had spent recent weeks pricing in meaningful hike risk, and the immediate reaction across yields, the dollar, and bitcoin suggests investors are already recalibrating toward Goldman’s more dovish view. Wednesday’s FOMC minutes will offer the next real test of that repricing, revealing how deep the divide runs between the Fed’s hawkish dissenters and the majority Hatzius expects to hold the line through year-end. Until then, risk assets are likely to keep tracking every incremental data point for confirmation that the disinflation trend Goldman is betting on continues to hold.