Goldman Sachs Sees 25-Basis-Point Fed Hike in March as October Inflation Runs Hot
Updated
Updated · Reuters · Nov 11
Goldman Sachs Sees 25-Basis-Point Fed Hike in March as October Inflation Runs Hot
3 articles · Updated · Reuters · Nov 11
Summary
Goldman Sachs now expects the Federal Reserve to raise rates by 25 basis points in March, reversing its prior view that the hiking cycle would end in December.
Three straight upside inflation surprises, including hotter-than-expected October data, drove the shift; markets already fully price a quarter-point increase on Dec. 9, according to CME FedWatch.
Goldman said March is more likely than January for a third hike because inflation may ease late this year before start-of-year price pressures and elevated costs push it up again.
The bank also pushed its first expected rate cut to December 2027 from September 2027, with further cuts penciled in for March, June and September 2028.
Inflation has been fueled by higher oil prices tied to the Iran war, Trump's tariffs, resilient consumer demand and strong AI investment, adding to voter anger after Republican midterm losses.