Goldman Sachs has pushed back its forecast for the Federal Reserve's next interest rate hike from October to December 2026, after US inflation data came in below market expectations. Previously, Goldman Sachs had expected the Fed to raise rates by another 0.25% at its October meeting, but it now says it has moved its forecast for the second rate hike to December and sees a high chance that the Fed's monetary policy committee, the FOMC, may ultimately conclude that no further rate increases are needed. The revision in outlook came after data released on Wednesday, September 30, showed that US inflation in August rose less than expected, with the personal consumption expenditures price index, or PCE, up 3.4% from a year earlier, below the 3.7% economists surveyed by Reuters had expected. Meanwhile, interest rate futures reflected roughly a 38% chance that the Fed will raise rates by 0.25% in October, according to data from the CME FedWatch Tool, down from about 51% the previous day and nearly 71% a week earlier. Investors are now watching the US nonfarm payrolls report for September, due on Friday, to assess the direction of Fed rate policy going forward.
Goldman Sachs Group IncGoldman Sachs revised its Fed rate-hike forecast to December 2026 after softer-than-expected PCE inflation, a macro monetary call rather than a company-specific event.
