Goldman Sachs, JP Morgan expect September Fed hike as inflation lingers

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, meanwhile, forecasts quarter-point hikes in both September and December.

The latest data have revived concerns that progress toward the Fed's 2% inflation target could stall after months of moderation.

"We think that the FOMC will be reluctant to surprise," Goldman Sachs economist David Mericle said.

J.P. Morgan struck a similarly hawkish tone following the inflation reports.

"The week that saw rising bond yields and energy prices and a firm enough set of inflation readings to make a rate hike at next week's FOMC meeting more likely than not," J.P. Morgan economists led by Michael Feroli said in a note.