Goldman Sachs sees October Fed hike after hawkish signal
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The Fed on Wednesday raised interest rates by 25 basis points to a 3.75%-4.00% range
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Goldman Sachs has revised its forecast, now anticipating another quarter-point interest rate increase from the Federal Reserve in October. This shift makes the bank one of the first major Wall Street institutions to predict consecutive rate hikes, following the central bank’s hawkish guidance on Wednesday.
This new outlook marks a reversal from Goldman’s previous position, which held that the US Fed had concluded its tightening cycle after the quarter-point increase in September.
The firm stated that the Fed’s updated rate projections, which indicated a strong majority of officials expect at least one more hike this year, support a “two-hike baseline” for 2026.
Goldman identified October as the most probable timing for the next move, noting that policymakers framed additional tightening as necessary for “a timelier return” to the Fed’s 2% inflation goal.
The Federal Reserve earlier on Wednesday raised interest rates by 25 basis points, bringing the target range to 3.75%-4.00%.
Goldman described the meeting as more hawkish than anticipated, pointing to the rate projections, an upward revision to the neutral interest rate, and Chair Kevin Warsh’s repeated characterization of the action as merely having “removed a dose of accommodation.”
According to CME Group’s FedWatch tool, traders now see approximately 50% odds of another quarter-point rate hike in October, a significant increase after the signal that further tightening might be required.
With this revised forecast, Goldman Sachs leaves Bank of America Global Research as the only other major brokerage expecting a more aggressive path, with BofA projecting hikes in both October and December.
Markets will also be closely monitoring policy decisions from the Bank of England, scheduled for later in the day, and the Bank of Japan on Friday, for further insights into the global interest-rate trajectory.
Published on September 17, 2026
