Goldman Sachs delays Fed rate hike forecast to December 2026
CIE News ·
Goldman Sachs pushed back its expectation for the next Federal Reserve rate hike to December 2026, citing softer August inflation data and projecting lower core PCE figures.
Goldman Sachs postponed its baseline expectation for the next Federal Reserve rate hike from October to December 2026, according to client notes reported by crypto.news and thestar.com.my on October 1, 2026. The investment bank noted that the Federal Open Market Committee may ultimately determine that further tightening is unnecessary. The adjustment followed August core Personal Consumption Expenditures data that came in softer than expected.
According to crypto.news, Goldman Sachs now projects fourth-quarter core PCE inflation at 3.0% year-over-year, which is 0.4 percentage points below the median 3.4% estimate from Fed officials. The bank's shift comes after New York Fed President John Williams indicated that policymakers face no urgency to follow September's rate increase with an immediate move in October.
Market expectations for an impending policy tightening have diminished alongside the revision. As reported by thestar.com.my, CME Group FedWatch pricing showed the probability of an October quarter-point rate increase dropping to approximately 38%, down from about 71% a week earlier.