Goldman Sachs: After three consecutive inflation readings that exceeded expectations, expects the Fed to raise rates by 25 basis points in December and again next March
The U.S. CPI rose 0.4% month over month in October, while core CPI rose 0.3%. Both figures were higher than expected, marking the third consecutive inflation reading to exceed expectations. Goldman Sachs has therefore raised its rate-hike forecast: it expects the Fed to raise rates by 25 basis points in December and another 25 basis points next March. Previously, Goldman Sachs expected just one rate hike in December.
Goldman Sachs also noted that the third rate hike could come as early as next January, though March is slightly more likely. Its forecast for the first rate cut has been pushed back to December 2027.
The latest CME FedWatch data show an 88.5% probability of a 25-basis-point rate hike in December and an 11.5% probability of a 50-basis-point hike. By next January, the probability of a cumulative 50-basis-point increase rises to 59.2%.
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The U.S. CPI rose 0.4% month over month in October, while core CPI rose 0.3%. Both figures were higher than expected, marking the third consecutive inflation reading to exceed expectations. Goldman Sachs has therefore raised its rate-hike forecast: it expects the Fed to raise rates by 25 basis points in December and another 25 basis points next March. Previously, Goldman Sachs expected just one rate hike in December.
Goldman Sachs also noted that the third rate hike could come as early as next January, though March is slightly more likely. Its forecast for the first rate cut has been pushed back to December 2027.
The latest CME FedWatch data show an 88.5% probability of a 25-basis-point rate hike in December and an 11.5% probability of a 50-basis-point hike. By next January, the probability of a cumulative 50-basis-point increase rises to 59.2%.
$BTC $ETH
#fed #cpiwatch
