4 Major Banks Forecast Fed Quarter-Point Hike as Market Odds Jump to 89%
Updated
Updated · Quartz · Sep 14
4 Major Banks Forecast Fed Quarter-Point Hike as Market Odds Jump to 89%
3 articles · Updated · Quartz · Sep 14
Summary
Goldman Sachs, JPMorgan, HSBC and Deutsche Bank now expect the Fed to raise rates by 25 basis points at its Sept. 15-16 meeting, reversing earlier calls for no move.
August inflation came in hotter than expected, with a key core-price gauge posting its biggest monthly rise in four months, while crude oil climbed above $100 a barrel as Middle East hostilities intensified.
Fed hike odds in CME pricing rose to about 88%-89% from 67%-70% before last week’s inflation data; Goldman had seen only about 30% odds last month and called a September increase very unlikely.
JPMorgan said higher bond yields, firmer inflation and energy prices made a hike more likely than not, and lifted its estimate of the long-run policy rate to 3.25%.
The Fed has kept rates unchanged all year after a quarter-point cut at the end of 2025, and several banks now expect borrowing costs to stay higher for longer as policymakers chase a 2% inflation target.