Goldman Sachs Shifts Fed Rate Hike Outlook to December

Goldman Sachs has pushed its forecast for the Federal Reserve’s next rate increase from October to December after August inflation data came in softer than expected and New York Fed President John Williams said there was no urgency to act. The bank also sees a substantial chance the Fed will decide that no further hikes are needed, projecting fourth-quarter core PCE inflation at 3%, below policymakers’ 3.4% median forecast. Other economists say the data support pausing in October but caution that inflation remains elevated and has not shown sustained progress toward the Fed’s 2% target. Strong U.S. growth and consumer spending add to the uncertainty over whether the Fed will resume tightening later in the year.