Goldman Sachs Adds March 2027 Fed Hike, Delays First Cut to December

Goldman Sachs expects the Federal Reserve to raise interest rates by 25 basis points in December and again in March 2027, while pushing its forecast for the first rate cut to December 2027 after October U.S. CPI came in well above expectations.

Goldman Sachs Chief U.S. Economist David Mericle expects the December increase to be the Fed’s second and the March move to be its third. He sees March as slightly more likely than January for the third hike, though Goldman expects inflation readings for November and December to be relatively mild. Persistent cost pressures and larger price increases early next year could lift January inflation.

Goldman kept its forecast for the federal funds rate to peak at 3.25% to 3.5%. The revised outlook moves the expected start of rate cuts back one quarter from the bank’s previous forecast.

The update follows Goldman’s earlier outlook, which left a December hike as a possibility after an October pause.