Goldman Sachs: Fed to Hike Another 25bps in October, Terminal Rate Held at 3.25-3.5%
nashnova research
After the Fed raised rates 25bp to 3.75%-4.00% in September, Goldman Sachs revised its call and now expects another 25bp hike in October — but stresses this is not the start of a longer hiking cycle, with the terminal rate still anchored at 3.25%-3.50%.
Why did Goldman suddenly change its call?
Goldman previously expected September to be the only rate hike. The Fed's September statement came in more hawkish than Goldman anticipated.
This means → Goldman is not forecasting a new trend — it is correcting its own misjudgment. It underestimated the Fed's urgency on inflation.
Goldman argues that back-to-back hikes are the most natural path to drive inflation back to 2% "more promptly."
Will hikes continue after October?
Goldman states explicitly: after one more hike in October, further tightening is not its base case.
The core reasoning is a divergence in inflation forecasts. Goldman's projection for core PCE — the personal-consumption-expenditures price index, the Fed's preferred inflation gauge — runs below the FOMC median.
The gap: Q4 this year, Goldman sees 3.2% vs. the FOMC's 3.4%; Q4 next year, Goldman sees 2.2% vs. 2.5%.
In plain terms = Goldman believes inflation is falling faster than the Fed itself expects, so fewer hikes are needed.
What about the terminal rate and the path to cuts?
Goldman holds its terminal rate — the peak of this hiking cycle — unchanged at 3.25%-3.50%.
It expects the first cut in September 2027, followed by 25bp cuts in December 2027 and March 2028.
This means → in Goldman's script, rates stay elevated for nearly three years before stepping down slowly.
Why is JPMorgan buying long bonds right now?
Bob Michel, CIO of JPMorgan Asset Management, announced his team has begun buying long-dated government bonds in the US, Japan, and Australia.
His words: current prices are "just too cheap," and the bond market has reached "the point of maximum pain."
Michel's logic: Fed hikes → rebuild anti-inflation credibility → long-term inflation expectations fall → long-bond yields stabilize or decline. Buying now catches the bottom.
What should markets watch next?
Two key checkpoints: ① whether Goldman's October hike call actually materializes; ② whether Goldman's below-FOMC inflation forecast proves accurate.
This means → if actual inflation data tracks closer to Goldman's numbers, markets will lean toward believing the hiking cycle is near its end. If not, the terminal rate may be repriced higher.
In plain terms = these two data points decide whether markets exhale or stay on edge.
市场有风险，内容仅供研究参考，不构成投资建议。