Goldman Sachs pushed its forecast for the next US interest rate hike to December after a softer-than-anticipated inflation reading cooled expectations the Federal Reserve would hike rates again in October.
The brokerage had previously forecast a 25-basis-point increase in October.
"We are pushing back the second hike in our forecast to December, and we see a strong chance that the FOMC will ultimately conclude that additional rate hikes are unnecessary," Goldman Sachs said in a note on Wednesday.
The Fed raised rates in September, marking its first hike in three years and the first policy move under new chief, Kevin Warsh, in a bid to tackle inflation.
Data on Wednesday showed US inflation rose less than expected in August. The personal consumption expenditures price index increased 3.4% on an annual basis in August, below the 3.7% estimate of economists polled by Reuters.
On Tuesday, Federal Reserve Bank of New York President John Williams said the central bank had time to weigh the data before deciding when to hike interest rates again.
Rate futures markets now reflect about a 38% probability of a quarter-percentage-point rate hike in October, according to CME Group's FedWatch Tool, from roughly 51% in the prior session and nearly 71% a week ago.
Market participants are focused on the crucial US nonfarm payrolls report for September that is due on Friday.
