Goldman Sachs backs 25bp Fed hike after CPI

Goldman Sachs has revised its Federal Reserve forecast and now expects a 25-basis-point rate increase when policymakers conclude their Sept. 15–16 meeting. Summary Goldman Sachs now expects a 25-basis-point Federal Reserve rate increase at Wednesday’s policy decision meeting. August consumer prices rose 0.4%, while annual headline inflation stayed unchanged at 3.4% across America. Core CPI increased 0.3% monthly but eased to a five-year-low 2.4% annual rate in August. Interest-rate futures assigned an 87% probability to a September hike after the inflation release Friday. The FOMC will publish its decision, projections, and policy statement on September 16 in Washington. CoinDesk reported on Sept. 13 that Goldman abandoned its previous forecast for no change after August consumer inflation data and interest-rate futures strengthened the case for a hike. The Federal Open Market Committee will announce its decision at 2 p.m. Eastern Time on Sept. 16. A press conference is scheduled for 2:30 p.m., according to the Federal Reserve’s official calendar. A quarter-point increase would lift the federal funds target range from 3.50%–3.75% to 3.75%–4.00%. The Fed has not committed to that de...