Ahead of Trump Announcement, Goldman Slashes 2025 Yield Forecasts

Goldman Sachs strategists, led by George Cole, have preemptively cut their Treasury yield forecasts before President Trump’s Rose Garden announcement.

The team has significantly reduced their year-end projections, with 2-year yields now expected to finish 2025 at 3.3% (previously 3.95%) and 10-year yields at 4% (previously 4.35%).

Their revised outlook stems from expectations of a “more severe tariff baseline,” which they predict will create a cumulative 15 percentage point increase in effective tariff rates.

While these tariffs will likely push inflation higher—with core PCE potentially reaching 3.5% year-over-year—Goldman also foresees economic deceleration prompting the Federal Reserve to implement three consecutive quarter-point rate cuts beginning in July.

The bank notes yields might temporarily drop below these forecasted levels as markets navigate between recession concerns and economic resilience.