Goldman Sachs now expects the U.S. Federal Reserve to raise its benchmark interest rate again in October. Under the bank’s revised view, the move would be a 25-basis-point increase.
The change marks a reversal from Goldman’s earlier forecast, which called for a September hike followed by a pause. The revision came after the Fed on Wednesday lifted rates by 25 basis points, taking the target range to 3.75%-4.00%.
The Fed’s updated projections showed that a strong majority of policymakers expect at least one more increase before the end of the year. At the post-meeting press conference, Fed Chair Kevin Warsh also maintained a hawkish tone, saying inflation remains “too high.”
Warsh said the latest move merely removed a “dose of accommodation,” signaling that policy may still not be restrictive enough and that additional rate hikes could still be ahead.
According to CME’s FedWatch tool, markets were pricing in just over a 50% chance of another 25-basis-point hike in October at the time of publication.
Bitcoin, meanwhile, was trading near $76,260, up just 0.5% over the past 24 hours.
