Goldman Now Sees Another Fed Rate Hike Coming in October

Goldman Sachs has scrapped its call for a Federal Reserve pause, telling clients it now expects the central bank to raise interest rates again in October. The revision, reported Thursday, follows a quarter-point hike delivered by the Fed a day earlier and unusually blunt comments from Fed Chair Kevin Warsh suggesting policymakers still see inflation as too hot to declare victory.

The shift matters because it recalibrates how investors — including those in digital assets — should read the pace of monetary tightening heading into the final months of the year. Bitcoin was trading near $76,260 on the news, up a modest 0.5% over 24 hours, a sign that markets had not fully priced in the more aggressive path Goldman now anticipates.

What Happened This Week

On Wednesday, the Fed raised its benchmark rate by 25 basis points, lifting the target range to 3.75%-4.00%. That move itself was not a surprise; it was widely expected. What changed the calculus was the tone struck by Chair Warsh afterward. He characterized the increase as merely removing a “dose of accommodation” from the economy, language that implies policy is still not restrictive enough to bring inflation fully under control. The Fed’s own updated projections reinforced that reading, showing a majority of policymakers now anticipate at least one more rate increase before year-end.

Goldman’s revised forecast is a direct response to that combination of the hike itself and the hawkish framing around it. Previously, the bank had expected the September increase to be followed by a pause, giving the Fed room to assess the cumulative effect of its tightening campaign. Now it expects the central bank to press ahead with another quarter-point move in October rather than wait. Traders have moved with the shift: futures tracked by the CME FedWatch tool now show just over a 50% probability of another 25-basis-point hike next month, up from a much lower reading before Wednesday’s decision. For a deeper look at how the initial hike rippled through crypto markets, see our earlier coverage of the quarter-point Fed increase and its effect on Bitcoin and Ether.

What It Means for Crypto Markets

Interest rate policy has become one of the most closely watched macro variables for digital asset prices, and this episode is a reminder why. Higher rates raise the opportunity cost of holding non-yielding assets and tend to tighten the liquidity conditions that have historically supported speculative risk-taking, a category into which crypto is still largely grouped by traditional finance. A Fed that hikes twice in quick succession, rather than pausing to evaluate, signals a central bank more concerned with entrenched inflation than with slowing growth — a stance that markets generally interpret as less friendly to risk assets in the near term.

That said, Bitcoin’s muted, slightly positive reaction to this news suggests the market had already partially absorbed the possibility of continued tightening. Prices near $76,260 with a small gain do not reflect panic, but they also do not reflect relief. It is a market in a holding pattern, waiting for confirmation of whether Goldman’s revised call proves accurate before repricing more decisively in either direction.

The timing also lands amid a broader wave of activity in U.S. crypto policy, which adds another layer of complexity for investors trying to separate monetary signals from regulatory ones. Just this week, a House panel advanced a Bitcoin reserve bill that critics say has been stripped of its substance, while the Senate blocked the Clarity Act, leaving crypto’s federal rulebook stalled once again. Meanwhile, the SEC has moved to open the door to onchain trading of real U.S. equities, a development that intersects with the same institutional infrastructure now expanding into crypto compliance, as seen in S&P Global’s recent acquisition of the stablecoin auditor OpenZeppelin. Macro policy and regulatory policy are moving on separate tracks, but both shape the environment digital assets operate in.

What to Watch Next

The most immediate signal to track is the CME FedWatch probability itself, which will shift as new economic data — inflation readings, employment figures, consumer spending — arrives ahead of the Fed’s October meeting. A probability climbing meaningfully above the current 50% mark would confirm Goldman’s thesis is gaining broader market acceptance; a retreat would suggest the pause scenario is not dead yet.

• Whether incoming inflation data in the coming weeks supports or undercuts the case for a second consecutive hike.
• Any further public remarks from Chair Warsh or other Fed officials clarifying how restrictive they believe current policy actually is.
• How Bitcoin and broader crypto markets react as the October meeting approaches and probability estimates firm up.
• Whether other major banks follow Goldman in revising their own Fed forecasts, which would signal a broader consensus shift.

For now, the takeaway is straightforward: the Fed has not signaled it is done tightening, and markets, crypto included, are adjusting their expectations accordingly rather than reacting with alarm.

Source: CoinDesk

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