Goldman Sachs Predicts 85% Chance of Fed Rate Hike in September

Goldman Sachs has assigned an 85% probability to a 25 basis point interest rate hike at the Federal Reserve's upcoming meeting. This outlook aligns with a shifting market consensus that has moved away from earlier expectations of a pause in rate adjustments.

The Federal Open Market Committee is scheduled to meet on September 15-16, 2026. The current effective federal funds rate is 3.63%, sitting within a target range of 3.50% to 3.75%. If the Federal Reserve moves forward with the anticipated hike, the target range would shift to 3.75% to 4.00%.

Market analyst Albert Edwards has publicly criticized the potential for a rate increase, labeling the move as "criminally stupid." Despite this opposition, market data indicates that the likelihood of a pause across the next three Federal Reserve meetings has declined significantly.

The upcoming meeting is viewed as a key indicator for the direction of U.S. monetary policy. Market participants are expected to monitor comments from Federal Reserve Chairman Kevin Warsh and Governor Michelle Bowman for clues regarding future policy decisions.

A confirmed rate hike could impact assets sensitive to interest rate changes and influence market pricing for future meetings. Any deviation from the current market expectation of a hike could result in notable market adjustments.