According to a research report released by Goldman Sachs, in line with a compromise of raising rates at every other meeting, the Federal Open Market Committee (FOMC) kept the federal funds rate unchanged at its October meeting held overnight on the 28th.
The firm continues to expect a second and final rate hike in December, which would bring the federal funds rate target range to 4% to 4.25%. However, if inflation comes in higher than expected, a third rate hike in March next year remains possible.
The report noted that Chair Warsh delivered balanced remarks, pointing out that while the economy and labor market remain strong, inflation expectations are moving in the right direction, and recent policy tightening has begun to take effect.
In addition, Warsh announced that a policy working group will submit its report before the end of the year for review in the first quarter of 2027, and that the future schedule will allocate certain meetings entirely to broad monetary strategy without holding votes on the federal funds rate.
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