Inflation Beats Expectations for Third Consecutive Time, Goldman Sachs Raises Fed Rate Hike Forecast

on November 11, Goldman Sachs said on Tuesday that, after October inflation data came in above expectations and exceeded forecasts for a third consecutive month, the bank expects the Federal Reserve to further raise interest rates by 25 basis points in March 2027.

Goldman Sachs stated: “The October CPI report showed figures significantly above expectations across multiple categories, marking the third consecutive month that inflation data came in worse than anticipated. We continue to forecast a second 25-basis-point rate hike from the Federal Reserve in December, and we have factored in a third 25-basis-point increase for March 2027. The third hike could potentially come earlier in January 2027, but we consider a March hike slightly more likely. This is because we expect inflation readings for November and December to ease; however, with persistent cost pressures, the typically pronounced increases in goods and services prices at the beginning of the year may drive inflation back up in January 2027.” The Federal Reserve already implemented its first rate hike in September 2026.