Goldman Sachs Expects Third Fed Rate Hike in March 2027, Delays Rate-Cut Forecast by a Quarter

What happened

Goldman Sachs now forecasts a third 25-basis-point U.S. Federal Reserve rate increase in March 2027, after expecting a second increase in December. It delayed its forecast for the start of rate cuts by one quarter, to December 2027, and kept its projected peak federal funds rate target at 3.25% to 3.5%.

Confirmed

Global impact / market context

If inflation stays persistent and the Fed raises rates, borrowing costs for households and businesses could remain higher for longer. That may weigh on company investment and demand, while a later start to rate cuts could change expectations for interest-sensitive assets and Goldman Sachs’ rate outlook.

Analyst inference

Goldman links its revised timing to expected near-term inflation: it anticipates milder reports in November and December, then renewed cost pressure early in 2027. It still expects prices to trend significantly lower by year-end as tariff, energy-shock and AI-related pressures fade.

Confirmed

What to watch

1. Goldman expects the Fed’s December dot plot, a chart of policymakers’ rate projections, may signal a third increase; compare that signal with the firm’s forecast. Confirmed
2. A stronger January inflation report could make a rate increase the Fed’s easiest choice, according to Goldman; the report’s outcome is not yet known. Confirmed
3. Watch whether inflation eases enough for the Fed to begin cuts in December 2027; a different path could alter borrowing costs and business investment expectations. Analyst inference

Evidence

• binance.com