Goldman Sachs has pushed back its forecast for a second Federal Reserve rate hike from October to December, after August core inflation came in near 3% — and the bank now sees a strong chance the Fed decides no further hikes are needed at all.
By Yasmin Al-Rashid | October 1, 2026
The Hook: The Rate Path Just Shifted, and Markets Noticed
According to a report from Investing.com, Goldman Sachs revised its rate forecast following the September 30 inflation release and comments from New York Fed President John Williams. The bank still includes a December increase in its base case, but it now sees a strong probability that the Federal Open Market Committee concludes another hike is unnecessary. That is a meaningful change from earlier in September, when Goldman had moved the other way and backed a September increase as interest-rate futures priced an 87% probability of a hike.
Why does this matter for crypto investors? Because rate expectations move Bitcoin. Higher rates make cash and bonds more attractive and tend to drain appetite for risk assets like crypto; expectations of a pause or a dovish shift tend to do the opposite. Bitcoin trades near 83,760 USD in the latest CoinGecko snapshot, down almost 1% on the day, with the market calibrating to every hint about the Fed’s next step.
The Numbers Behind the Shift
- 3.01% year-over-year — August core PCE inflation, the Fed’s preferred gauge, up 0.25% from July and below expectations.
- 3.0% — Goldman’s new forecast for fourth-quarter core PCE, 0.4 percentage points below the Fed policymakers’ median projection of 3.4%.
- 49.3% — CME FedWatch odds of an October quarter-point hike on Tuesday afternoon, down from 70.9% on Monday.
- 2.2% annualized — revised second-quarter U.S. GDP growth, up 0.7 percentage points on stronger consumption and investment.
Goldman attributed part of the lower annual core inflation reading to methodological changes, particularly a revision to the portfolio management component — a reminder that even “hard” data gets rewritten. Meanwhile, the bank trimmed its third-quarter growth tracking estimate by 0.1 percentage points to 3.3% after the goods trade deficit widened more than expected.
The Core Conflict: Patience vs. Persistence at the Fed
The Fed is split, and the split is now public. On one side, John Williams told Reuters on September 29 he saw “no urgency” to follow September’s move with an immediate second hike — though one additional increase this year remains his base case. On the other, Governor Michael Barr, speaking at the Detroit Economic Club, warned that inflation risks have increased while employment risks have eased, pointing to high energy costs, Middle East uncertainty and demand linked to artificial intelligence investment.
Barr’s record on the trend is stark: he counted only two months in the previous twenty with readings consistent with the Fed’s 2% core PCE target, and said he has yet to see a clear path back. “In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion,” he said, while describing U.S. employment as solid — unemployment at 4.1%, job creation averaging around 80,000 a month this year.
Where Rates Stand Right Now
Context for the decision ahead: at its September 16 meeting, the Fed raised rates by a quarter point to a target range of 3.75% to 4% — its first increase since July 2023, passed with a unanimous 12-0 vote. September’s economic projections showed 16 of 18 participants expecting at least one more quarter-point increase before year-end, with the median placing rates at 4% to 4.25% at the end of both 2026 and 2027. Goldman Sachs Asset Management’s fixed-income chief Kay Haigh called a December hike his team’s base case, dependent on inflation reports and energy prices.
The next big checkpoint lands quickly: September’s U.S. employment report is scheduled for October 2, ahead of the Fed’s next meeting. A weak print would strengthen the patience camp; a hot one would hand ammunition to Barr’s.
What This Means for You
For anyone holding crypto, the playbook is straightforward. A Fed that hikes again in October is a headwind — tighter money historically pressures Bitcoin and altcoins. A Fed that waits until December, or stops altogether, removes a weight from the market and supports the kind of risk-on flows that powered the third-quarter recovery. The odds have already swung sharply: from roughly 71% to under 50% for an October hike in a single day.
The verdict: Goldman’s shift is not a promise that hikes are over — inflation near 3% is still well above target, and one hawkish governor is arguing the opposite case. But the balance of risks has tilted, and for now the market’s most powerful macro headwind is on pause. Watch the October 2 jobs report; it may matter more for your portfolio than any token announcement this week.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
goldman pushing the hike to december after that 3% core print is basically them admitting the september call was wrong. futures had it at 87% and now look
@teo wait, you blame goldman for sept? futures were the ones at 87%, the bank just followed the street. the interesting bit is the strong chance of NO further hikes at all
Williams basically telegraphed this in his comments. Anyone actually listening to the NY Fed instead of trading headlines had this priced a week ago
cooler core inflation and a delayed hike forecast, btc quietly loved this. risk assets breathe easier every time december gets pushed instead
Goldman pushing the next hike call to December after core inflation printed 3% is a quiet admission September was probably the last one. markets had already priced that days ago
cooler core inflation plus a 0.1pp trim to 3.3% growth tracking is the soft landing combo. one hot CPI print though and that December call moves again fast
futures dropped from 70.9% odds of a hike to basically nothing after that GDP revision to 2.2%. Williams saying no urgency on Sept 29 telegraphed the whole thing