Goldman Sachs expects the Federal Reserve to raise rates once more, at its Oct. 27 meeting, then pause if a sustained oil-price pullback cools inflation. It forecasts Brent at $85 a barrel by December and rate cuts beginning in late 2027.
Brent had fallen nearly 13% from its recent $113 peak to about $98.44, slipping below $100. The article attributes the sell-off to Saudi Arabia's partial restart of the East-West Pipeline and says US-Iran diplomatic dialogue at the UN General Assembly further eased the geopolitical risk premium.
Goldman chief economist Jan Hatzius said the firm expects core PCE inflation to cool faster than the Fed projects and rate cuts toward its estimated neutral rate of 3.25%-3.5% beginning in late 2027. He also cited little modern precedent for the Fed skipping meetings before elections, noting a 75-basis-point hike six days before the 2022 midterms.
