Goldman Sachs joins Wall Street consensus, expects the Federal Reserve to hike rates by 25 basis points at its September 16 meeting.
Goldman Sachs' Chief US Economist, David Mericle, stated in a September 11 research report that the firm has incorporated a 25 basis point rate hike by the Federal Reserve in September into its baseline forecast, a change from its previous prediction of no action. This shift is primarily driven by the higher-than-expected US August CPI data and the market having priced in an approximately 90% probability of a rate hike. Goldman Sachs believes the Federal Reserve will be reluctant to remain on hold to maintain its credibility. Following the release of the August CPI data, most major Wall Street investment banks, including JPMorgan Chase, Citi, and MUFG, have also adjusted their forecasts, forming a consensus for a "September rate hike," but significant divergences exist in their subsequent path predictions. TD Securities, for instance, expects a total of three rate hikes, while Citi anticipates that after a September hike, the Fed will remain on hold until June 2027.
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