Major brokerages expect next Fed rate hike in December
TLT•Global brokerages largely expect the Federal Reserve to raise rates at least once more this year, with many forecasting a December move. Goldman Sachs shifted its forecast from an October hike to December; rate futures showed a 38% chance of an October hike, down from nearly 71% a week earlier.
1. Forecasts shift to December
Goldman Sachs joined several major brokerages in forecasting a December rate hike, after previously expecting a 25-basis-point increase in October. The shift followed data showing the personal consumption expenditures price index rose 3.4% year over year in August, below economists’ 3.7% estimate.
2. Brokerage rate projections
In the forecasts listed for 2026, BofA Global Research expected two hikes, in October and December, taking the federal funds rate to 4.25%-4.50%. Most other brokerages projected one 25-basis-point December hike and a rate of 4.00%-4.25%; Citigroup expected no policy change and a rate of 3.75%-4.00%.
3. October meeting ahead
Rate futures reflected about a 38% probability of an October quarter-point hike, down from nearly 71% a week earlier. The Fed was scheduled to meet on October 27 and 28 after raising rates in September.
