Inflation Exceeds Expectations for Third Consecutive Time, Goldman Sachs Raises Fed Rate Hike Forecast

Odaily reports: Goldman Sachs said on Tuesday that after October inflation data came in above expectations—marking the third consecutive month of upside inflation surprises—the bank expects the Federal Reserve to raise rates by another 25 basis points in March 2027. Goldman Sachs stated: "The October CPI report was significantly above expectations across multiple categories, marking the third consecutive month in which inflation data came in more severe than expected. We continue to expect the Fed to deliver a second 25 basis point rate hike in December, and we have incorporated a third 25 basis point hike into our March 2027 forecast. The third hike could also be brought forward to January 2027, but we see a slightly higher probability of a March hike. This is because we expect inflation data in November and December to moderate somewhat, but given persistent cost pressures, the typically larger price increases for goods and services at the start of the year could push inflation back up in January 2027." The Fed already carried out its first rate hike in September 2026. (Jinshi)