Goldman Sachs Slips as Economists Predict Another Rate Hike in October

Goldman Sachs' shares slipped by about 0.1% to $937.26 after its economists revised their rate outlook, predicting another Federal Reserve increase in October.

The Fed's target range now stands at 3.75%-4%, and 16 out of 18 officials expect at least one more hike this year, while four anticipate two increases.

This new forecast from Goldman Sachs is significant for markets, but it remains an economic call rather than a guarantee that policymakers will follow the same path.

The increased rate expectations could have both positive and negative effects on Goldman Sachs. On the one hand, higher volatility can drive more hedging, trading, and risk-management activity through its markets franchise. On the other hand, pricier financing can cool acquisitions, delay equity offerings, and pressure asset valuations.

Investors are already paying a premium for Goldman Sachs stock, with it trading 13.04% above its estimated fair value of $829.15.