Goldman Sachs: The Federal Reserve is expected to cut interest rates by 25 basis points in September, and five-year US Treasury bonds are the best trading option before interest rate cuts

The five-year Treasury is the most attractive trading option at the moment amid the prospect of a cut in interest rates by the Federal Reserve, said Mr. Shivlin, chief strategist for global banks and markets at Goldman Sachs. He noted that five-year yields in the 3-4 per cent range offer investment value while providing protection against rising market risks. Five-year Treasury yields are currently at 3.85 per cent, down significantly from 4.38 per cent at the start of the year. According to a Reuters poll, 61 per cent of economists expect the Fed to cut the base rate by 25 basis points to a 4-4.25 per cent range at its September meeting. Goldman Sachs forecasts that considering the slowdown in real GDP growth and higher unemployment, the Federal Reserve may start a rate-cutting cycle in the fourth quarter of 2025 and continue to implement accommodative policies in 2026, eventually adjusting the policy rate to 3% -3.25%. (Golden Ten)