Goldman Sachs said the Federal Reserve will complete its final rate hike of 2026 at the October 27 policy meeting, after which the current tightening cycle may end. According to Sina Finance, the bank said continued declines in oil prices and easing inflation are key to making that two-hike scenario possible, while the market broadly expects the Fed to keep hiking this month.

Goldman Sachs forecast Brent crude will fall to $85 a barrel by December. Chief economist Jan Hatzius wrote in a recent report that there is little precedent in the modern Federal Open Market Committee history for skipping a rate hike on the eve of an election, citing the most notable case as a 75-basis-point increase six days before the 2022 midterm elections. After October, Goldman expects the federal funds rate to remain steady as core personal consumption expenditures inflation slows faster than the committee expected, and it still sees the Fed beginning to cut rates at the end of 2027, eventually lowering them to its estimated neutral range of 3.25% to 3.5%.

At least this week, Goldman’s oil-price view has been partly validated. Crude futures have sold off sharply over the past few days as concerns about supply disruptions from geopolitical tensions eased slightly. Brent crude has fallen nearly 13% from a recent high of $113 a barrel, dropped below the key psychological level of $100, and was trading near $98.44. The latest decline was triggered by the partial resumption of operations on Saudi Arabia’s East-West pipeline, while diplomatic talks between the United States and Iran at the United Nations General Assembly also weighed on prices. The geopolitical risk premium that had pushed oil to a year-to-date high has gradually faded.