Fed Rate Hike Anticipation Grows as Inflation Concerns Mount

Goldman Sachs and J.P. Morgan have shifted their expectations to anticipate a U.S. Federal Reserve interest rate hike this week, following stronger-than-expected inflation readings.

The latest data showed that U.S. consumer and producer prices rose more than expected in August, while oil prices climbed above $100 a barrel due to renewed hostilities in the Middle East.

In a note on Friday, Goldman Sachs abandoned its previous call for rates to remain unchanged and now expects a 25-basis-point increase at the U.S. Fed's September 15-16 meeting.

J.P. Morgan forecasts quarter-point hikes in both September and December, citing concerns that progress toward the Fed's 2% inflation target could stall after months of moderation.