• Home
• News

Wall Street giants Goldman Sachs and JPMorgan have revised their macroeconomic projections, now forecasting that the U.S. Federal Reserve will raise benchmark interest rates by 25 basis points at its September 15–16 Federal Open Market Committee (FOMC) meeting. The shift follows a cluster of hotter-than-anticipated inflation readings alongside surging energy costs, dampening expectations that price pressures could subside toward the Fed's 2% target without further monetary tightening.

Wall Street Projections & Rate Path

Goldman Sachs: Abandoned its previous baseline of an interest rate pause. Lead economist David Mericle stated that the FOMC will be reluctant to run counter to market momentum, projecting a 25 bps hike this week.

JPMorgan: Adopted an even more hawkish stance, anticipating two 25 bps increases before year-end—one in September and a second in December. The bank also revised its long-term terminal rate projection upward to 3.25%.

Key Macroeconomic Catalysts

The hawkish repricing is driven by several compounding inflationary pressures:

Hotter Price Indices: Both U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) prints for August exceeded consensus estimates, calling into question the durability of the disinflation trend.

Energy Shock: Escalating regional conflicts in the Middle East drove global crude oil benchmarks above $100 per barrel, renewing headline inflation risks and supply-side price pressures.

Bond Market Moves: Rising Treasury yields over the preceding week have tightened broader financial conditions, reinforcing the case for official policy alignment.

Market Implied Probabilities

According to the CME FedWatch Tool, futures markets have aggressively adjusted expectations ahead of Wednesday's policy announcement:

Metric / HorizonPrior ProbabilityCurrent Probability

September 25 bps Rate Hike~70%87%

Subsequent December HikeMixed / PausedPriced In as Likely

Global Market Outlook

Global investors will focus squarely on the Fed’s updated dot plot and economic projections at the conclusion of Wednesday’s meeting to gauge the expected duration of elevated interest rates. Concurrently, market participants are monitoring incoming monetary policy signals from the Bank of Japan, which also concludes its policy deliberations this week.