Goldman sees September Fed hike unlikely

TLDR

Goldman Sachs now sees a September Federal Reserve rate hike as very unlikely, which slightly improves the backdrop for Bitcoin and other risk assets.

1. Goldmans economists argue recent soft inflation, jobs, and retail sales data make a September hike low probability, with futures pricing roughly a 30 percent chance of an increase.
2. Bitcoin is trading near 63,500 dollars, up about 1 percent, as falling hike odds help risk appetite, though crypto remains range bound and sensitive to macro surprises.
3. The main catalysts now are the upcoming Fed minutes and further inflation and jobs data, which could still shift expectations and drive volatility even without a hike.

Deep Dive

1. Goldmans Call

Goldman Sachs chief economist Jan Hatzius told clients a September rate increase is very unlikely, citing weaker retail sales, slowing employment data, and cooling inflation readings that make current pricing too hawkish for the federal funds rate Goldman view.

CME FedWatch probabilities now show roughly a 30 percent chance of a September hike and about 70 percent odds that the Fed holds its 3.50 to 3.75 percent target range, down from more than 50 percent hike odds a week earlier rate odds.

Goldman expects the Fed to keep rates steady through most or all of 2026, with cuts likely pushed to late 2026 or 2027 if inflation keeps drifting lower.

2. Crypto Market Impact

Lower hike odds ease pressure on risk assets because a stable policy rate supports liquidity and reduces fears of tighter credit, which historically weighed on Bitcoin during aggressive hiking phases. Bitcoin (BTC) is trading around 63,500 to 63,600 dollars, up about 1 percent on the day, and still stuck in a 62,000 to 66,000 dollar range that has held for weeks BTC range.

The total crypto market cap is about 2.18 trillion dollars, up roughly 0.65 percent over 24 hours, with Bitcoin dominance near 58.5 percent, indicating modest risk-on rotation but no full-scale appetite shift.

Historical data this year shows that each Fed hold has often been followed by short-term crypto weakness, so a pause is not automatically bullish for prices hold pattern.

3. What To Watch Next

The July Fed minutes, upcoming inflation prints, and labor market data remain crucial. If they confirm moderating inflation and a cautious Fed, the market can stay comfortable with no September hike, supporting risk assets at current valuation levels.

However, any upside surprise in inflation or a tougher tone in the minutes could push hike odds back up, strengthen the dollar, and pressure Bitcoin and altcoins, even if the Fed still ultimately holds rates.

Confidence: moderate because Goldmans view and current futures pricing are well documented, but future data could still shift expectations quickly.

Conclusion

Goldmans call that a September hike is very unlikely reduces immediate policy risk and aligns with futures pricing, which has moved toward a 2026 pause. For crypto, that means slightly better macro carry but not a clear directional signal. The key is how upcoming Fed communications and data reshape expectations, since in this cycle Fed decisions have mostly acted as volatility events rather than a simple up or down switch for Bitcoin.