Goldman Sachs has raised its forecast for the Federal Reserve’s monetary policy, now anticipating a third interest rate hike in March 2027. The federal funds rate is expected to peak at between 4.25% and 4.50% before declining toward a final rate of 3.25% to 3.50% in 2028. The revision follows several inflation reports that exceeded expectations, suggesting a more aggressive Federal Reserve policy. Markets see the forecast as consistent with increased odds of rate hikes in 2026, while the planned cuts in December 2027 signal an easing phase after rates peak.
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