Goldman Sachs Expects a Third Fed Rate Hike in March Next Year, Delays Rate-Cut Forecast by a Quarter

November 11 — Goldman Sachs said US October CPI came in unexpectedly and sharply above expectations, according to Cailianshe. In a report, the firm's chief US economist David Mericle wrote that he still expects the Fed to deliver a second 25-basis-point rate hike in December, and added a third 25-bp hike in March 2027 to the forecast; the third hike could also be moved forward to January, but March is slightly more likely because inflation data for November and December are expected to be relatively mild, while larger price increases early in the year, amid persistent cost pressures, are expected to push up January inflation. Goldman kept its forecast for the terminal fed funds rate at 3.25% to 3.5% unchanged, but now expects the Fed to begin cutting rates only in December 2027, a quarter later than previously forecast.