Goldman Sachs Predicts 0.25% Rate Hike in September 2026

Goldman Sachs predicts the US Federal Reserve will raise interest rates by 0.25% in September 2026. This prediction joins a growing number of Wall Street firms forecasting further tightening by the Fed amid ongoing concerns about inflation. Goldman Sachs reversed its previous forecast of a rate hold, citing high market expectations and the potential for policymakers to avoid surprises by continuing to raise rates. The prediction change primarily reflects shifting market expectations rather than a significant change in economic outlook, with the recent rise in oil prices potentially influencing policymakers to support further tightening. Market sentiment, as measured by the FedWatch tool of the Chicago Mercantile Exchange, currently prices an 87% probability of a 0.25% rate hike in this month's meeting.