Goldman Sachs Delays Rate Hike Forecast to December Following PCE Data

Following August PCE inflation data that came in lower than expected, Goldman Sachs has pushed back its forecast for the Federal Reserve's next interest rate hike from October to December, noting that further hikes may not be necessary. While the PCE data reduced the urgency for an October hike, market pricing via the CME FedWatch Tool shows a 39% probability for an October hike and 90% for December. Meanwhile, U.S. economic data remains resilient, with Q2 GDP growth revised upward to 2.2% and August consumer spending rising by 0.9%. Analysts remain divided on whether inflation trends have meaningfully improved, as core inflation remains above the Fed's 2% target.