Goldman Sachs (GS) has executed a dramatic reversal of its Federal Reserve forecast, abandoning its prior expectation that rates would remain unchanged at this week’s September 15-16 FOMC meeting and now projecting a 25-basis-point hike that would lift the federal funds rate to a target range of 3.75% to 4.00%.
As recently as last month, the bank's chief economist Jan Hatzius had characterized a September rate increase as "very unlikely," arguing that softer jobs and inflation data made it difficult to justify any shift toward tightening.
