Goldman Sachs Warns the Fed Could Keep Raising Rates Into 2027

Goldman Sachs Asset Management is preparing for a Federal Reserve that keeps tightening well into 2027, a path the market has not priced in. Lindsay Rosner, head of multi-sector fixed income investing, says stronger inflation could push policymakers into a harsher cycle than they have signaled so far, and she sees a December hike as just the first step. Long bonds, rate-sensitive stocks and the dollar are all positioned for a Fed close to finishing, so a longer run of hikes would force a painful repricing in each of them.

Core Inflation Gives Rate Hike Supporters Fresh Evidence

Core CPI ran at 3.7% annualized over the past three months, the highest since January 2025. Supercore inflation, which tracks services, jumped to 5.5% annualized, its fastest pace since April 2024. October’s data showed a split: coffee fell 3.6%, the biggest monthly drop on record, and used cars slid 1.2%, while lettuce rose 7.9% and city bus and train fares climbed 6.6%.

Goldman’s Anthropic Forecast and Nvidia Pressure

Goldman, lead bank on Anthropic’s IPO, reportedly projects the AI lab’s revenue will pass $600 billion by 2030, up from $4.6 billion in 2025 and $52 billion expected in 2026. Nvidia faced its own pressure, as Bank of America dropped it from its top picks list and a report tied the CEO’s alleged affair with a Chinese spy to $7.5 billion in chip shipments to China.