Goldman Sachs Turns to Forecast of October Fed Rate Hike After September Increase; Bitcoin Holds Near $76,000
Summary
- Goldman Sachs reversed its forecast for a pause after the Fed's September rate increase and now expects an additional rate hike in October.
- The shift reflects the Fed's hawkish signals, while CME FedWatch shows markets pricing in a more than 50% chance of a 0.25 percentage-point rate increase in October.
- Bitcoin held near the $76,000 level with little movement, rising about 0.5% from 24 hours earlier.
Forecast Trend Report by Period
Goldman Sachs has reversed its previous forecast that the Federal Reserve would pause after a September rate increase and now expects an additional hike in October.
CoinDesk reported on September 17 that Goldman Sachs expects the Fed to raise its benchmark interest rate by another 0.25 percentage point in October. The bank had earlier projected that the Fed would hold rates steady after a September increase.
The Fed raised its benchmark rate by 0.25 percentage point to 3.75% to 4.00% at the Federal Open Market Committee meeting a day earlier. It was the first rate increase of 2023.
The revised forecast appears to reflect hawkish signals from the Fed. The central bank's rate projections showed that a majority of policymakers expect at least one additional increase this year.
Fed Chair Kevin Warsh said at a press conference that inflation remains "too high." He described the latest rate increase as removing "some of the degree of accommodation" in policy, signaling the possibility of further tightening.
Markets are also increasingly leaning toward another move in October. CME FedWatch shows traders pricing in a greater than 50% chance of an additional 0.25 percentage-point increase in the benchmark rate that month.
Bitcoin, meanwhile, was little changed and held near $76,000. As of publication, it was trading at $76,260, up about 0.5% from 24 hours earlier.
