Goldman Sachs Revises October Expectation for Fed Interest Rate
International financial institution Goldman Sachs updated its predictions regarding the monetary policy steps of the Federal Reserve and shared a new assessment.
Goldman Sachs revised its prediction regarding the Fed's interest rate hikes, announcing that they expect the FOMC to implement a second 25 basis point rate hike in October.
Interest Rate Hike Expectation Updated
Goldman Sachs revised its prediction regarding the Fed's interest rate hikes and shared its new expectations. The institution's Chief US Economist, David Mericle, stated that they expect the FOMC to go for a second 25 basis point rate hike in October.
Inflation Target and Meeting Process
In the published note, it was stated that consecutive interest rate hikes at back-to-back meetings would support a more timely return process to the Fed's 2 percent target, as foreseen by the FOMC.
Midterm Elections Pose No Obstacle
According to the economist, the upcoming US midterm elections are unlikely to pose an obstacle to another tightening step in October. These elections constitute a minor obstacle ahead of a second rate hike.
Baseline Scenario and Core PCE
While it was stated that additional rate hikes are possible, it was also added that this is not the bank's baseline scenario due to its projection that core PCE inflation will remain below the median forecast of FOMC participants.