Goldman Sachs pushes Fed rate hike forecast to December
TLT•Goldman Sachs shifted its forecast for the next Fed rate hike from October to December after August inflation came in below expectations. It said there was a strong chance the Fed would conclude further hikes were unnecessary.
1. Forecast shifts to December
Goldman Sachs pushed its forecast for the next U.S. interest rate hike to December, after previously forecasting a 25-basis-point increase in October. The firm said there was a strong chance the Federal Open Market Committee would ultimately conclude additional rate hikes were unnecessary.
2. Inflation and market odds
The personal consumption expenditures price index rose 3.4% year over year in August, below economists’ 3.7% estimate. Rate futures reflected about a 38% probability of a quarter-percentage-point October hike, down from roughly 51% in the prior session and nearly 71% a week earlier. Investors were focused on the September nonfarm payrolls report due Friday.
