Goldman Sachs has sharply revised its forecast for U.S. Federal Reserve policy in 2025, now projecting three interest rate cuts—each of 25 basis points—to come in September, October, and December.

The Wall Street investment bank previously anticipated just one cut this year but says recent developments in the labor market and inflation trajectory warrant a more aggressive shift.

“We had previously thought that the peak summer tariff effects on monthly inflation and the recent large increases in some measures of household inflation expectations would make it overly awkward and controversial to cut sooner,” Goldman analysts wrote in a note published Monday.

“But early evidence suggests that the tariff effects look a bit smaller than we expected,” they added, noting that disinflationary forces have been stronger than expected across several sectors.

Tariff Impact Weaker Than Feared

The revision comes just months after the Trump administration’s move in April to implement “reciprocal tariffs” on major trading partners, a policy shift that initially prompted fears of rising inflation. Although the tariff hikes were later paused, economists had warned that pre-emptive consumer spending to beat the tariffs might spur volatility in price levels. However, May’s consumer spending data came in weaker than expected, and monthly inflation only increased moderately, suggesting that tariff-related shocks have not materialized to the extent previously feared.

This data, combined with a decline in household demand for durable goods and signs of slackening job market conditions, has emboldened forecasts for a more accommodative monetary stance. Goldman now sees the Federal Reserve’s terminal rate at 3.00%–3.25% by the end of 2026, significantly lower than its previous projection of 3.50%–3.75%.

Broad Street Consensus Builds Around September Start

Goldman is not alone in its revised outlook. Citigroup, Wells Fargo, and UBS Global Research all expect rate cuts totaling 75 to 100 basis points in 2025. Like Goldman, these institutions forecast the first cut to begin in September, marking a growing consensus across Wall Street that the Fed is likely to pivot in the fall. UBS, notably, projects a full percentage point (100bps) of rate cuts by year’s end.

However, the Federal Reserve has remained publicly cautious. Fed Chair Jerome Powell recently testified before Congress, reiterating the central bank’s stance that more data is needed before initiating any rate reductions. He emphasized that the Fed remains focused on returning inflation to its 2% target and noted that policy easing is not imminent.

Echoing this view, Atlanta Fed President Raphael Bostic said he still expects just one cut in 2025, citing “robust underlying strength” in employment and consumer activity.

Eyes on the June Jobs Report

The next key data point will arrive on Thursday, when the U.S. Labor Department releases the June jobs report. Analysts are watching closely for signs that labor market weakness is deepening. Slowing job creation or rising unemployment could tip the balance decisively toward earlier rate cuts.

Goldman believes the labor market is already showing enough signs of slack to justify action.

“We’ve seen softness in wage growth, declines in job openings, and reduced employer demand across multiple sectors,” the firm noted. “These are not recessionary signals, but they do warrant policy easing.”

Political Uncertainties

Beyond the economic indicators, political factors may also shape the Fed’s calculus. With President Donald Trump pledging further tariff expansions, markets remain on edge about potential inflationary fallout from a second wave of trade restrictions. At the same time, Trump has openly criticized Fed policy in recent months, and there are growing expectations that he could appoint a more dovish Fed Chair when Jerome Powell’s term ends in 2026.

That uncertainty is prompting traders to price in even more aggressive easing in 2026, with some bond markets now expecting up to five rate cuts over the next 18 months. If realized, that would represent the most substantial rate reduction cycle since the Fed slashed rates during the early stages of the COVID-19 pandemic in 2020.

The implications of a 75bps cut cycle are significant. For borrowers, lower rates would mean cheaper loans and mortgages. For investors, the pivot could breathe fresh life into equity markets, especially rate-sensitive sectors like technology and real estate. Corporate debt issuance is also expected to rise as companies move to refinance at more favorable rates.

But a pivot could also trigger broader concerns about economic resilience. Some economists argue that rate cuts at this stage could be premature and risk stoking new asset bubbles—particularly in real estate and crypto markets, which have rebounded strongly in recent months on expectations of lower borrowing costs.

However, Goldman Sachs’s revised outlook for three rate cuts in 2025 signals a growing belief on Wall Street that the U.S. economy is cooling fast enough to justify monetary easing—despite the Fed’s cautious rhetoric. While tariff-induced inflation risks appear to be subsiding, the full picture will become clearer with June’s labor market data.

Africa has made a landmark move toward financial independence with the launch of PAPSSCARD, the continent’s first unified Pan-African card payment system.

The card was unveiled during the 32nd Annual Meetings of the African Export-Import Bank (Afreximbank) held in Abuja, Nigeria, marking a bold step in Africa’s ongoing effort to reclaim control over its financial infrastructure and trade systems.

The PAPSSCARD is a product of a tripartite collaboration between Afreximbank, the Pan-African Payment and Settlement System (PAPSS), and Mercury Payment Services (MPS). It is designed to serve as a home-grown solution for retail payments across Africa, allowing secure, fast, and low-cost transactions without reliance on global payment networks such as Visa or Mastercard.

But the card is only the latest chapter in a larger financial infrastructure shift led by PAPSS.

PAPSS: A Step Toward Africa’s Financial Reclamation

Launched in January 2022 by Afreximbank in partnership with the African Union (AU) and the African Continental Free Trade Area (AfCFTA) Secretariat, PAPSS was created to modernize cross-border payments and eliminate the major hurdles stifling African trade.

PAPSS operates as a centralized payment and settlement platform that enables instant and secure transactions in local currencies across African borders. It is the first system of its kind on the continent that allows buyers in one African country to pay sellers in another without needing to convert funds into foreign currencies like the US dollar or euro.

Unlike traditional cross-border transactions, which involve a maze of correspondent banks, currency conversions, and intermediary charges, PAPSS facilitates direct local currency settlement. This not only simplifies and speeds up transactions, but also cuts foreign exchange costs, reduces dependency on external systems, and enhances monetary sovereignty.

By May 2025, the system had already onboarded over 150 banks across 16 African countries, including Nigeria, Ghana, Rwanda, and Egypt. Nigeria’s participation is considered both symbolic and strategic, given its status as Africa’s largest economy and its substantial role in regional trade flows.

A Card for Everyday Use—and a Shift in Power

The introduction of PAPSSCARD now extends that infrastructure directly to consumers, businesses, and public institutions. It is the first card that allows users to transact across African countries in their local currencies, processed entirely within Africa’s financial network.

Prof. Benedict Oramah, President and Chairman of Afreximbank, described the card as a pivotal tool in Africa’s push for economic autonomy.

“For too long, Africa’s reliance on external payment systems has impeded trade, increased costs, and compromised control over our financial data,” said President and Chairman of Afreximbank, Prof. Benedict Oramah.

“PAPSSCARD changes that. It empowers us to move money swiftly, securely, and affordably across our borders. It is a transformative step towards strengthening intra-African trade and preserving value within the continent,” he added.

According to Mike Ogbalu III, CEO of PAPSS, the card embodies a deeper mission beyond convenience.

“This is a symbol of progress and self-reliance. It’s a product built by Africans for Africans—designed to work with how we trade and live,” he said.

Muzaffer Khokhar, Executive Chairman of Mercury Payment Services, reinforced the card’s symbolic weight saying, “This is about creating trust in African systems. The PAPSSCARD will become Africa’s most trusted payments brand.”

Strategic Rollout: From Kigali to Lagos

The rollout involves a wide array of strategic partners. Bank of Kigali and I&M Bank Rwanda are among the early issuing institutions, while Smart Cash (Rswitch), Rwanda’s national switch, and Unified Payments in Nigeria are working to integrate the card into local systems.

According to John Bosco Sebabi, Acting CEO of PAPSSCARD, the card will drive financial innovation, reduce transaction costs for governments and businesses, and expand access to modern financial tools for the underserved.

The launch in Nigeria was accompanied by the release of commemorative cards, symbolizing both the historical and operational importance of the initiative.

Aligned With AfCFTA’s Vision

The PAPSSCARD and its supporting infrastructure dovetail with the goals of the AfCFTA, which aims to boost intra-African trade by removing barriers and harmonizing regulations across the continent. Financial integration has long been a weak link in Africa’s economic chain. PAPSS and the new PAPSSCARD aim to close that gap, offering seamless transaction support for goods and services exchanged under AfCFTA protocols.

This development also supports Afreximbank’s broader objective of building self-sustaining trade ecosystems within Africa, reducing the continent’s exposure to external shocks, and fortifying its economic resilience.

While early adoption looks promising, the long-term success of the PAPSSCARD will hinge on interoperability, consumer trust, and the scaling of acceptance infrastructure, particularly in underserved regions. Analysts also say integration with mobile money platforms and fintech ecosystems will be essential to maximize reach.

Many believe the PAPSS initiative is a milestone in Africa’s quest for its own payment system. For the first time, Africa is building a financial future anchored in its own institutions, data, and digital rails—not those controlled from outside the continent.