Goldman Sachs pushed its forecast for the next Federal Reserve interest rate increase to December from October, citing Wednesday’s inflation report and New York Fed President John Williams’s call for patience. The bank now forecasts core inflation of 3.0% in the fourth quarter from a year earlier, below Fed policymakers’ median projection of 3.4%, and sees “a strong chance that the FOMC will ultimately conclude that additional rate hikes are unnecessary.”

August core personal consumption expenditures prices rose 3.0% from a year earlier, below the 3.3% forecast but unchanged from July’s revised rate. The monthly increase was 0.247%, rounding to 0.2%. Downward revisions to earlier months accounted for most of the annual surprise, with the Bureau of Economic Analysis changing how it measures investment advisory services, software and legal services. Williams said Tuesday that “there is no need for urgency” after September’s rate increase, while leaving open another increase late this year.

Treasury yields erased their initial declines after the inflation report and turned higher. The 30 year yield reached 5.64%, its highest since 2002, while the 10 year yield rose to 5.30%. Other economic figures showed stronger demand: inflation-adjusted consumer spending increased 0.6% in August, its biggest monthly gain since March 2025, and second-quarter GDP growth was revised to a 2.2% annual rate from 1.5%.