Goldman Sachs said that the US CPI report for October greatly exceeded expectations. “We still expect a second 25 basis point rate hike in December and include the forecast for the third 25 basis point rate hike in March 2027,” said David Merrick, chief US economist at Goldman Sachs. “The third rate hike may arrive in early January, but we think March is more likely because we expect the November and December inflation reports to be moderate, but then we expect continued cost pressure at the beginning of the year to push up inflation in January, leading to a sharp rise in prices.” Goldman Sachs still believes that as the impact of factors such as tariffs, energy shocks, and artificial intelligence price pressure gradually subsides, prices will show a significant downward trend by the end of next year. Despite this, recently released inflation data is likely to prompt most Federal Reserve members to suggest a third rate hike in the December bitmap, and a stronger inflation report in January will make raising interest rates the least resistant path, even if the energy shock seems to be over by then. Goldman Sachs maintained its forecast for the ultimate goal of the federal funds rate, which is still 3.25% to 3.5%, but now it is expected that the rate cut will begin in December 2027, one quarter later than before.

Goldman Sachs said that the US CPI report for October greatly exceeded expectations. “We still expect a second 25 basis point rate hike in December and include the forecast for the third 25 basis point rate hike in March 2027,” said David Merrick, chief US economist at Goldman Sachs. “The third rate hike may arrive in early January, but we think March is more likely because we expect the November and December inflation reports to be moderate, but then we expect continued cost pressure at the beginning of the year to push up inflation in January, leading to a sharp rise in prices.” Goldman Sachs still believes that as the impact of factors such as tariffs, energy shocks, and artificial intelligence price pressure gradually subsides, prices will show a significant downward trend by the end of next year. Despite this, recently released inflation data is likely to prompt most Federal Reserve members to suggest a third rate hike in the December bitmap, and a stronger inflation report in January will make raising interest rates the least resistant path, even if the energy shock seems to be over by then. Goldman Sachs maintained its forecast for the ultimate goal of the federal funds rate, which is still 3.25% to 3.5%, but now it is expected that the rate cut will begin in December 2027, one quarter later than before.