Surging trade tensions between the U.S. and China and the increased prospects of a hard Brexit mean the Federal Reserve will cut its benchmark interest rate three times this year, according to a revised outlook from economists at Goldman Sachs Group Inc.

The investment bank no longer expects a trade deal with China before the 2020 U.S. election, and said the Fed has grown increasingly responsive to trade tensions, global growth worries and bond market shifts.

"In light of growing trade policy risks, market expectations for much deeper rate cuts, and an increase in global risk related to the possibility of a no-deal Brexit, we now expect a third 25-basis-point rate cut in October, for a total of 75 basis point of cuts," economists led by Jan Hatzius wrote in a note.

Goldman sees a 75% chance of a 25-basis-point cut in September, a 15% chance of a 50-basis-point cut and a 10% chance of no cut.

For the October meeting, the bank sees see a 50% chance of a 25-basis-point cut, a 10% chance of a 50-basis-point cut and a 40% chance of no cut.

"By the December meeting, we think inflation numbers running at roughly 2% will lead the Fed to stop cutting," Goldman’s economists wrote.

This story provided by Bloomberg News.