CoinDesk
Goldman Sachs now expects the Federal Reserve to raise interest rates again in October, a 180-degree reversal from its earlier call for a September hike followed by a pause. The shift came after the Fed on Wednesday lifted its benchmark rate by 25 basis points to a 3.75%-4.00% target range, and its updated projections showed a strong majority of policymakers expecting at least one more increase this year.
At the post-meeting press conference, Fed Chair Kevin Warsh struck a hawkish tone, saying inflation remains "too high" and describing the latest hike as removing only a "dose of accommodation," implying policy is still not restrictive enough.
Why it matters
Goldman flipping its call is a signal event for rate expectations: one of Wall Street's most closely followed forecasters now aligns with the Fed's own hawkish projections. Markets had been leaning toward a hike-then-pause path, and the revision forces a repricing of the entire front end of the curve.
As of writing, traders put just over a 50% chance on another 25 basis point hike in October, per CME's FedWatch tool, meaning the market itself is nearly split on what the Fed does next.
Market impact
Risk assets face the direct brunt of a higher-for-longer path. Bitcoin continues to trade near $76,260, up just 0.5% over 24 hours, holding its ground for now but with no bid strength as liquidity conditions tighten.
The next real test is the October meeting itself: if incoming inflation data keeps the majority of the Fed's projections intact, expect the probability of another hike to firm above 50% and further pressure crypto and equities.
Frequently asked questions
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What is Goldman Sachs' new Fed rate call?
Goldman Sachs now expects the Federal Reserve to raise rates by another 25 basis points in October, reversing its earlier forecast of a September hike followed by a pause.
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How much did the Fed raise rates and to what level?
The Fed raised its benchmark rate by 25 basis points on Wednesday, bringing the target range to 3.75%-4.00%.
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What did Fed Chair Kevin Warsh say about inflation?
Warsh said inflation remains "too high" and described the latest hike as removing only a "dose of accommodation," implying policy is not yet restrictive enough.
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What are the market odds of an October Fed hike?
Traders price just over a 50% chance of another 25 basis point hike in October, according to the CME FedWatch tool.
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How is Bitcoin reacting to the hawkish Fed outlook?
Bitcoin continues to trade near $76,260, up just 0.5% over 24 hours, with no strong directional move as rate expectations shift.
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