Goldman Sachs, TD Securities Forecast October Rate Hike After Fed’s First

The U.S. Federal Reserve lifted its benchmark interest rate by 25 basis points on Wednesday, setting the target range at 3.75% to 4.00%. It marked the central bank’s first rate increase since 2023. Officials’ projections released alongside the decision signaled continued monetary tightening through the remainder of this year.

Goldman Sachs revises outlook to include October hike

Following the Federal Open Market Committee (FOMC) meeting, Goldman Sachs adjusted its forecast, now anticipating a further 25-basis-point increase in October. The firm had previously viewed the September hike as the final move in the current tightening cycle. New signals from the Fed prompted the revision. According to Goldman Sachs, officials’ median projections outline a baseline path featuring two hikes in 2026 — the first occurring in September and the second scheduled for October.

TD Securities projects three hikes, extending to January 2027

TD Securities, the Canadian investment bank, issued a more aggressive forecast five days before the Fed’s meeting. It predicted three rate increases within the current tightening cycle: in September, October, and January 2027. That represented a reversal from its earlier expectation that rates would remain unchanged through the end of 2026. The shift followed August inflation data, which came in above expectations. The September increase has already occurred. The October and January hikes remain pending. TD’s projection thus implies a steeper path than the Fed’s current median forecast, which indicates only one additional increase in 2026.

Bank of America joins multi-hike camp

Bank of America, according to Reuters, anticipates two further hikes — in October and December — adding to the September move. This positions it closer to TD Securities than to Goldman Sachs, which does not foresee any increase beyond October.

Trump intensifies criticism of Fed Chair Powell

Former U.S. President Donald Trump directed his sharpest public criticism yet at Federal Reserve Chair Jerome Powell — whom he originally appointed — expressing strong disapproval on social media over the central bank’s decision to raise rates to curb persistent inflation.

Markets price in uncertainty

Market participants reflect ongoing uncertainty. According to the CME Group’s FedWatch tool, traders assign approximately a 50% probability to a 25-basis-point increase in October.