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      Goldman Sachs Predicts Second Federal Reserve Rate Hike in October

      Goldman Sachs has revised its forecast for the Federal Reserve, now anticipating a second 25 basis point rate hike in October. This marks a significant shift from its previous stance that the hike announced in September would be the only increase for the year. The adjustment positions Goldman ahead of other major financial institutions, such as JPMorgan and Morgan Stanley, which have been projecting a follow-up move in December instead of October.

      The bank's economists noted that the Federal Open Market Committee (FOMC) meeting on Wednesday revealed a more hawkish tone than expected. A notable 16 to 2 majority of FOMC participants indicated at least one more hike this year in the updated dot plot, and there were no dissenting votes on the rate decision. Additionally, the median funds rate projection remained elevated through 2029, and the estimate for the neutral rate was raised to 3.25% from 3.06%.

      Chair Kevin Warsh's comments during the meeting emphasized the removal of policy accommodation, which Goldman interpreted as a signal for further tightening rather than a one-off adjustment. This change in outlook narrows the gap between Goldman and other banks that have maintained a more hawkish stance, suggesting a higher likelihood of an active meeting in October, despite concerns about its timing close to the upcoming midterm elections in the United States.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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