Back on July 1, almost a month before the Fed, Goldman first indicated what is coming when it cut the the interest rate on its popular Marcus savings account from 2.25% to 2.15%. 30 days later, Fed Chair Jerome Powell followed.
Two months later, and less than three weeks before the September FOMC meeting, Goldman cut rates again from 2.15% to 2.00% in the process assured a second rate cut from the Fed. Sure enough, when the FOMC followed in mid-September, Powell dutifully did precisely what Goldman hinted a few weeks earlier it would do.
Fast forward a little over a month to today, 4 weeks before the October 29-30 FOMC meeting, when moments ago Goldman’s Marcus cut rates for the third time, from 2.00% to 1.90%, – hardly just a “mid-cycle adjustment” – and telegraphing that not only is a third rate cut from the Fed now 100% assured, but more will follow.
While there is no one more certain sign that the Fed will do the same in three weeks time, it won’t come as a surprise to the market which has long been pricing in 100% odds of at least 1.4 more rate cuts before the end of the year, and as of this afternoon, the odds of a 25bps cut on Oct 30 are 76%.
And while Goldman is quick to cut the savings rate on its Marcus accounts, we urge readers who are expecting the bank to similarly cut the APR on its recently launched, Apple co-branded credit card, not to hold their breath.