Goldman Sachs said the October U.S. CPI report came in well above expectations. According to Sina Finance, David Mericle, the firm’s chief U.S. economist, said Goldman still expects a second 25-basis-point rate hike in December and has added a third 25-basis-point hike in March 2027 to its forecast. Mericle said the third hike could come in early January, but March is more likely because Goldman expects milder inflation reports in November and December, followed by persistent cost pressures early in the year that would push January inflation higher and drive a sharp increase in prices.

Goldman Sachs still expects prices to trend significantly lower by the end of 2027 as tariff, energy-shock and AI-related price pressures gradually fade. Recent inflation data may prompt most Fed members to signal a third hike in the December dot plot, while a stronger January inflation report could make a rate hike the path of least resistance, even if the energy shock appears to have ended. Goldman kept its forecast for the federal funds rate’s terminal target unchanged at 3.25% to 3.5%, but now expects rate cuts to begin in December 2027, one quarter later than previously forecast.