Goldman Sachs pushes back Fed rate hike forecast to December after lower-than-expected inflation

InfoQuest··US·Read original
3▲1 ▼2Impact / 5
Summary · why it matters

Goldman Sachs has pushed back its forecast for the Federal Reserve's next interest rate hike to December, from an earlier expectation of October, after U.S. inflation data came in below expectations. The personal consumption expenditures price index, or PCE, one of the inflation gauges the Fed tracks, rose 3.4% year-on-year in August, below economists' forecast of 3.7%. As a result, interest rate futures now reflect roughly a 38% probability that the Fed will raise rates by 0.25% in October, according to CME Group's FedWatch tool, down from about 51% in Tuesday's trading and nearly 71% a week earlier. Goldman Sachs said in a report that there is a high chance the Fed's policy-setting Federal Open Market Committee, or FOMC, will ultimately conclude that no further rate increases are needed. The Fed has just raised rates in September, its first increase in three years and its first policy move under new Fed Chair Kevin Warsh. Meanwhile, New York Fed President John Williams said the Fed still has time to assess various data before deciding when to raise rates again, and investors are watching the U.S. nonfarm payrolls report for September, due to be released this Friday.

Impact on assets 4

Financials▲ · 1 stocks
Goldman Sachs Group Inc
GS
± MixedMonetaryrelevance

Goldman Sachs pushed back its Fed rate-hike forecast to December after softer PCE inflation, a macro-rate call rather than a company-specific event.

Carbon Removal (DAC)▲ · 1 stocks
CME Group Inc
CME
▲ PositiveDemandrelevance

CME Group's FedWatch tool is cited as the source for rate-hike probability data, highlighting usage of its interest-rate futures products.

Others▼ · 2 stocks
％Effective Federal Funds Rate
EFFR
▼ NegativeMonetaryrelevance

Softer-than-expected PCE inflation and Goldman's call that no further hikes are needed lower the expected path of the effective federal funds rate.

© 2026 MarketIVNews