Goldman Sachs: If the economy really falls into recession, the Federal Reserve may cut interest rates by 200BP next year Goldman Sachs has adjusted its expectations for a rate cut by the Federal Reserve, believing that there is a higher risk of further policy easing if an economic recession strikes. Goldman Sachs now expects the Federal Reserve to begin a series of interest rate cuts in June - earlier than previously predicted in July - as part of a precautionary easing cycle. Assuming that the United States avoids a recession, the Federal Reserve will cut interest rates by 25 basis points three times in a row, bringing the federal funds rate to the range of 3.5% -3.75%. However, Goldman Sachs expects that if the economy really falls into recession, the Federal Reserve will adopt a more aggressive policy response, cutting interest rates by about 200 basis points next year. Considering the increasing possibility of economic recession, the agency's current weighted forecast shows a total interest rate cut of 130 basis points in 2025, higher than the previous 105 basis points. As of last Friday's close, this outlook is largely consistent with current market expectations.