Goldman Sachs Sees Second Rate Hike in October

Goldman Sachs has updated its Federal Reserve rate hike forecast in response to last week's FOMC meeting. The investment bank now expects a second 25bp increase in October, rather than September as previously anticipated. According to Goldman Sachs Research, the most likely time for the next move is October because it aligns with delivering hikes that support a 'timelier return' to the 2% target at consecutive meetings.

The terminal rate remains unchanged at 3.25-3.5%, but Goldman Sachs expects additional cuts in September and December 2027, with a third 25bp cut in March 2028.