Goldman Sachs Postpones Fed Rate Hike Expectation to December
Known for its economic management and market analysis, the institution shared its new calendar forecast following inflation data and statements from central bank officials.
Goldman Sachs economists have postponed their expectation for the Fed's second rate hike from October to December, in line with remarks by New York Fed President John Williams and recently released inflation data.
Change in Rate Hike Forecast
Goldman Sachs economists changed their forecasts regarding the Fed's monetary policy following statements by New York Fed President John Williams and inflation data published on Wednesday.
According to the prepared note, the schedule for the second rate hike, which was previously expected to take place in October, has been shifted to December and shared with investors.
Inflation Data Falling Below Expectations
In the note prepared by the Goldman Sachs economics team led by Jan Hatzius, it was emphasized that the core inflation indicator in the August personal income and consumption expenditures data came in lower than expected.
According to the released data, the core personal consumption expenditures price index increased by 0.25 percent monthly and 3.01 percent annually, remaining below expectations.
October Probability and December Expectation
Economists stated that, when evaluated together with the remarks of New York Fed President John Williams, a rate hike in October is now a low probability.
The evaluations also expressed that there is a high probability the FOMC will conclude in the upcoming process that additional rate hikes will not be necessary.