Goldman Sachs expects Fed to deliver 25-basis-point hike

  • Goldman Sachs expects the Federal Reserve to raise rates by 25 basis points in September.
  • Markets price an 87% chance of a quarter-point September rate increase.
  • CME's FedWatch Tool shows markets also expect a December rate increase.

Goldman Sachs now expects the Federal Reserve to raise interest rates by 25 basis points at its September policy meeting, reversing its previous forecast for no change. The bank said its shift was driven mainly by market pricing rather than a significant change in its economic outlook. Stronger-than-expected U.S. producer price data and oil prices above $100 a barrel have renewed inflation concerns, while markets price an 87% chance of a quarter-point September increase and anticipate another rise in December, CME's FedWatch Tool shows.

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