Goldman Sachs sees 85% chance of Fed rate hike in September meeting

Albert Edwards, a prominent market analyst, has voiced strong opposition to a potential interest rate hike by the U.S. Federal Reserve, describing such a move as “criminally stupid.” Despite Edwards’ criticism, Goldman Sachs has projected an 85% probability that the Federal Reserve will raise rates by 25 basis points in its upcoming meeting. This expectation comes amid a broader market consensus leaning towards a rate increase, reflecting a shift in sentiment from earlier predictions of a pause. The Federal Open Market Committee (FOMC) is set to meet on September 15-16, 2026, to discuss the country’s monetary policy. The current effective federal funds rate stands at 3.63%, within the Fed’s target range of 3.50%–3.75%. Should the Fed proceed with the expected rate hike, it would adjust the target range to 3.75%–4.00%, indicating a tighter monetary policy. This development is crucial for assets sensitive to interest rate changes. Market data shows a significant decline in the probability of a pause across the next three Fed meetings, with the likelihood of a different decision sequence increasing substantially. This shift suggests that market participants are increasingly anticipati...