Goldman Sachs: CPI Largely in Line with Expectations; Fed Retains Option to Raise Interest Rates
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5 Articles
Goldman Sachs revised its September forecast for the Fed following the US inflation data. Previously expecting interest rates to remain unchanged, the bank now forecasts a 25 basis point increase. Approximately 90% of market pricing influenced this decision change.
Federal Reserve President Kevin Warsh faces intense pressure to raise interest rates at next week’s monetary policy meeting, after an expected inflation report showed that consumer prices in the United States moved forward again last month. Read more
SEB is changing its forecast after today's inflation figure and now believes that the US central bank will raise the key interest rate next week. "We believe that the Fed needs to implement an increase to strengthen its credibility in combating inflation," the bank writes in a market letter.
"The Fed hardly wants to be accused of not having reacted in time. Therefore, it will probably increase the key rate by 25 basis points to 3.75% to 4% next Wednesday."
According to ChainCatcher, Goldman Sachs economist Alexandra Wilson-Elizondo stated, "Today's CPI was largely in line with expectations, ostensibly the result investors wanted, but it does significantly increase the uncertainty surrounding next week's interest rate decision. The challenge is that the data doesn't fully reflect some of the recent inflationary pressures, and there's little evidence that inflation is returning to target in the near…
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