Goldman Sachs Delays Second Fed Hike Forecast to December

Goldman Sachs has revised its forecast for Federal Reserve rate hikes, pushing back its prediction of a second increase from October to December. This change comes after the August core Personal Consumption Expenditures (PCE) inflation reading came in below expectations, at 3%. The bank now expects 3% fourth-quarter core PCE inflation, which is lower than the Fed's median forecast of 3.4%. As a result, Goldman Sachs sees a strong chance that officials will decide another rate increase is unnecessary.

New York Fed President John Williams has also expressed caution about further tightening, stating that there is 'no urgency' to follow September's move with an immediate second hike. In contrast, Federal Reserve Governor Michael Barr continues to support further policy adjustments, citing increased inflation risks and a lack of clear path toward 2% core PCE inflation.

The upcoming September employment report is scheduled for release on October 2, ahead of the next Fed meeting. The report's findings could provide valuable insights into the state of the economy and inform the Fed's decision-making process.