Goldman flags $170B CTA buying cycle

Goldman Sachs told clients the latest commodity trading adviser buying wave in equities is largely finished after roughly $170 billion of purchases. (x.com) Commodity trading advisers, or CTAs, are systematic funds that tend to buy when prices rise and sell when prices fall. Goldman’s message was that this trend-following demand has moved back toward neutral after the recent rally. (bloomberg.com) (x.com) That matters because the same models can reverse quickly if equity indexes fall through key trigger levels. Goldman’s downside scenarios pointed to forced selling of about $125 billion to $240 billion, according to the client-note excerpts circulated Monday. (x.com 1) (x.com 2) Systematic flows have become a regular focus on Wall Street because they can amplify short-term market moves without any change in company fundamentals. Bloomberg reported in May 2025 that Goldman had expected CTAs to buy U.S. equities regardless of direction after tariff-driven volatility, showing how fast those models can swing with market conditions. (bloomberg.com) Goldman paired that market-flow warning with a macro call on the Federal Reserve. The bank said a change in Fed leadership would not automatically produce faster rate cuts and still forecast two 25-basis-point cuts in September and December. (x.com) (morningstar.com) That view lines up with other Wall Street analysis that a new chair cannot unilaterally force the Federal Open Market Committee into aggressive easing. J.P. Morgan said Kevin Warsh would still need to persuade a majority of colleagues and called substantial near-term easing improbable. (jpmorgan.com) The combined message from Goldman was straightforward: one source of mechanical equity support is fading, while the policy backdrop still points to a slower easing path than some traders want. (x.com 1) (x.com 2)