Goldman Sachs has reversed its previous forecast on US interest rates. The investment bank now projects the Federal Reserve will raise its benchmark interest rate by 25 basis points when the Federal Open Market Committee (FOMC) meeting concludes on September 15-16, 2026.
The earlier prediction that the Fed would keep rates unchanged has been dropped. Goldman’s shift in perspective comes shortly after the release of August consumer price index (CPI) inflation data, alongside interest rate futures traders increasingly converging on a single scenario.
If the FOMC committee executes a quarter-point rate hike, borrowing costs will rise. The target federal funds rate range would automatically shift upward from 3.50%-3.75% to 3.75%-4.00%.
Goldman Sachs analysts have also adjusted their core Personal Consumption Expenditures (PCE) inflation estimates. They revised their monthly core PCE projection upward to 0.26% in response to the August inflation report.
The Danger of Going Against the Market
According to Goldman analysts, the Fed risks triggering sharp market volatility if it leaves interest rates unchanged during tomorrow’s meeting. The reason is simple: futures contracts have already priced in a rate hike.
Futures instruments priced in an 87% probability of a rate hike shortly after the CPI data was reported. The jump from 72% the previous day reflects strengthening market conviction. The probability of at least one more rate hike before the end of 2026 has even surpassed 97%.
Current market conditions contrast sharply with the situation before the August CPI data was released. A Reuters survey conducted prior to the report found that a majority of economists still expected the Fed to hold rates, although confidence in that survey was steadily waning.
Holding rates steady is now viewed as carrying an unmerited shock risk for the Fed. This argument comes as markets are pricing in a nearly 90% probability of a 25 basis point hike.
Awaiting a Catalyst at $79,000
Tomorrow’s Fed decision will be a decisive catalyst for short-term capital flows across digital asset markets. Bitcoin demonstrated its resilience last week; its price briefly slipped before rebounding to the $79,000 level following the inflation data release.
Crypto participants and macro investors are now focusing on the official FOMC committee announcement at 2:00 PM ET on September 16. The interest rate decision will be followed immediately by a press conference at 2:30 PM ET.
For the crypto market, tomorrow’s interest rate clarity will eliminate uncertainty. Bitcoin’s next price trajectory will heavily depend on how hawkish Jerome Powell’s tone is when speaking to the public the following day.
Reported via crypto.news.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
