Goldman adds another rate hike to Fed outlook after hot inflation data
Goldman Sachs now expects the Federal Reserve to raise rates by 25 basis points in March, reversing its prior forecast after hotter-than-expected October inflation data. The update follows Deutsche Bank projecting hikes at each of the next three Fed meetings and a Reuters poll indicating one more increase in December. Wall Street analysts say the Fed may have erred by pausing earlier. The outlook hinges on incoming inflation and labor data before the central bank's next policy decisions.
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- ✓ Goldman Sachs expects a 25-basis-point Federal Reserve rate increase in March after hotter-than-expected October inflation data.
- ✓ Deutsche Bank says the Fed could hike at each of its next three meetings.
- ✓ A Reuters poll expects the Fed to raise rates once more in December as inflation risks stay high.
What changed
Goldman Sachs reversed its previous no-hike stance and now forecasts a 25-basis-point Federal Reserve rate increase in March following hotter-than-expected October inflation data.
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Goldman Sachs adds March Fed rate hike after hot October inflation data
Goldman Sachs now expects the Federal Reserve to raise rates by 25 basis points in March, reversing its prior forecast after hotter-than-expected October inflation data. The update follows Deutsche Bank projecting hikes at each of the next three Fed meetings and a Reuters poll indicating one more increase in December. Wall Street analysts say the Fed may have erred by pausing earlier. The outlook hinges on incoming inflation and labor data before the central bank's next policy decisions.
Why it matters
The Federal Reserve had previously signaled a pause in its tightening cycle, leading some forecasters to expect rates to hold steady. Persistent inflation pressures have shifted bank projections toward additional tightening. Goldman's reversal shows how quickly Wall Street is repricing the Fed path based on a single strong inflation print. Markets now face the possibility of back-to-back increases through early 2027 if price data remain elevated.
What is confirmed
- Goldman Sachs expects a 25-basis-point Federal Reserve rate increase in March after hotter-than-expected October inflation data.
- Deutsche Bank says the Fed could hike at each of its next three meetings.
- A Reuters poll expects the Fed to raise rates once more in December as inflation risks stay high.
Still unconfirmed
- Wall Street believes the Fed made a mistake by pausing rate hikes earlier.
What to watch next
- November and December 2026 inflation reports that could confirm or reverse the projected March hike.
- Federal Reserve policy meetings in December, January, and March for actual rate decisions.
confidence 85%Sources used for this update (15)
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