Goldman Sachs Expects Fed Rate Hike in March 2027

Goldman Sachs revised its forecast for the US Federal Reserve's interest rate following the release of October inflation data. The bank's analysts now expect a third increase of 25 basis points in March 2027, whereas they previously anticipated the end of the tightening cycle in December 2026. Under this scenario, the target rate range will reach 4.25–4.50%.

Why Goldman Sachs Revised the Forecast

On November 10, the US Bureau of Labor Statistics reported that consumer prices rose by 0.4% in October, exceeding the forecast of 0.3%. The core index, excluding food and energy, increased by 0.3%. Goldman Sachs' chief US economist, David Mericle, expects inflation to slow down in November and December but anticipates renewed price pressure in early 2027. Therefore, he considers an additional rate hike in March more likely than in January.

When the Fed Might Start Lowering Rates

In September 2026, the Fed raised the rate to 3.75–4.00%, and in October, it left it unchanged. Goldman Sachs expects the next increase of 25 basis points in December and another one in March 2027. The bank now forecasts the start of rate cuts in December 2027, three months later than the previous estimate. Additional cuts are expected in March, June, and September 2028, after which the range could be 3.25–3.50%.

All the mentioned timelines reflect Goldman Sachs' assessment, not an approved schedule of Fed decisions. The regulator's future policy will be influenced by new data on inflation, employment, and economic activity. Prolonged high rates may increase borrowing costs and pressure interest rate-sensitive assets.