Goldman Sachs shifted its baseline to a 25 basis-point rate hike at the Federal Reserve meeting concluding Sep 16, versus a prior hold, after August core CPI printed 0.3% month over month, hotter than the 0.2% estimate. Headline CPI rose 0.4% month over month and 3.4% year over year, matching consensus.
Chief U.S. economist David Mericle wrote that the FOMC will want to avoid the market reaction likely to follow a hold when markets price a nearly 90% chance of a hike. Additional future hikes are possible but are not Goldman’s baseline. JPMorgan and Citi, via secondary digests of bank notes, are aligned on a September hike; those paths are labeled secondary.
CME FedWatch hike odds sit near 85-90% as of post-CPI Friday and Saturday market stamps (about 86% Friday; 86.5% Saturday). Wells Fargo’s Darrell Cronk said the surprise would now be if the Fed stayed on hold. The decision remains Wed Sep 16; no outcome is claimed.
Sources: WSJ live card (Goldman Sep hike baseline; Mericle note quote; additional hikes not baseline); CNBC post-CPI (core MoM 0.3% vs 0.2%; headline 0.4%/3.4%; FedWatch ~86% Fri; Cronk hold=surprise); Seoul Economic Daily (FedWatch 86.5% Sat); Tiger Brokers / HTX secondary digests (Mericle flip; JPM Feroli and Citi Hollenhorst/Clark Sep hike alignment, labeled secondary); CME FedWatch tool (odds near 85-90% as of Sat Sep 12 stamp).
