Goldman Flips the Script: Fed Now Expected to Hike Again in October 📈

Goldman Sachs has reversed its earlier forecast and now expects the Federal Reserve to raise its benchmark interest rate by 25 basis points in October, a shift from its prior call for a September hike followed by a pause. The revision follows the Fed's Wednesday decision to lift rates to a 3.75%–4.00% target range and the release of updated projections showing a strong majority of policymakers anticipate at least one more increase this year.

At the post-meeting press conference, Fed Chair Kevin Warsh said inflation remains "too high" and characterized the latest hike as removing a "dose of accommodation," suggesting policy is not yet restrictive enough. Traders are pricing just over a 50% chance of an additional 25 basis points increase in October, according to the CME's FedWatch tool. Several major financial firms share the view that another hike is likely.

The Fed's September 16 rate decision and signals of further tightening come as the crypto market navigates a turbulent week that included the failure of the CLARITY Act in a Senate vote. Despite those headwinds, Bitcoin and major altcoins have held recent gains. Bitcoin continues to trade near $76,260, up just 0.5% on a 24 hour basis, reflecting the market's apparent absorption of the rate outlook.