Goldman pivots, now forecasts Fed rate hike in October
The Fed is likely to raise rates by 25 basis points in October, Goldman said, drawing attention to Fed's own hawkish near term rate projections.
Goldman Sachs now expects the Federal Reserve to raise its benchmark interest rate again in October, a 180-degree pivot from its earlier call for a September hike followed by a pause.
The shift comes after the Fed on Wednesday lifted rates by 25 basis points to a 3.75%–4.00% target range. The central bank’s updated rate projections revealed a strong majority of policymakers expecting at least one more increase this year.
At the post-meeting press conference, Fed Chair Kevin Warsh struck a hawkish tone, saying inflation remains “too high” and that the latest hike merely removed a “dose of accommodation,” implying policy is still not restrictive enough and more rate hikes may be in the pipeline.