Goldman Sees October Fed Hike After Two Forecast Shifts, Leaving Bitcoin and XRP Exposed to Unpriced Risk
Goldman Sachs changed its Federal Reserve forecast twice in four days, arriving at an October 25-basis-point hike as the new baseline after Chair Kevin Warsh declined to signal a pause and the Fed's dot plot showed 16…
Key takeaways
- Goldman Sachs revised its Federal Reserve forecast twice in four days, settling on an October 25-basis-point hike as its new baseline.
- The Fed voted 12-0 on September 16 to raise its target range to 3.75%-4.00%, its first increase since 2023, a move futures markets had already priced in.
- Bitcoin ($76,300) and XRP ($1.29) rose during the week but remain about 34% and 56% below year-ago levels, respectively.
- An October hike, if delivered, would arrive before markets have had equivalent time to absorb it, leaving Bitcoin and XRP exposed to unpriced risk.
- The Fed's dot plot showed 16 of 18 officials projecting at least one more increase in 2026, and its 2026 headline PCE inflation forecast was raised to 3.7%.
Goldman Sachs changed its Federal Reserve forecast twice in four days, arriving at an October 25-basis-point hike as the new baseline after Chair Kevin Warsh declined to signal a pause and the Fed's dot plot showed 16 of 18 officials projecting at least one more increase in 2026. $BTC and $XRP both gained through the week on a September hike that futures markets had already absorbed before the vote. October arrives with no comparable cushion.
The bank's first shift came on September 15, when Goldman moved from a no-hike call to expecting a 25-basis-point increase the following day, even as chief economist David Mericle said there was no strong economic case for the move and described further hikes as possible but not the baseline. The Federal Open Market Committee then voted 12-0 on September 16 to lift its target range to 3.75%-4.00%, the first increase since 2023. Within hours Goldman updated its view again.
What drove the second revision
Three things moved the second call: the dot plot, higher inflation forecasts, and Warsh's press conference. The Fed raised its 2026 headline PCE inflation forecast to 3.7%, and four of 18 officials projected two more hikes by year-end. Warsh said the Fed had removed a dose of accommodation and argued that financial conditions were difficult to describe as restrictive, while saying summer readings had not given him enough evidence that underlying inflation pressures were improving. Goldman concluded from those signals that the Fed was pushing for a timelier return to its 2% target and that September would not be the year's last move.
The setup for $BTC and $XRP
Bitcoin ($76,300) and XRP ($1.29) moved higher in the hours after the September 16 decision before giving back some of those gains, a pattern consistent with a market that had already priced the move. Both tokens are up roughly 18% and 28% over the past month, respectively, but remain well below year-ago levels: Bitcoin about 34% lower on that basis and XRP about 56% lower. XRP is also below its 200-day moving average, with additional support levels underneath the current price.
October's hike, if delivered, would arrive before markets have had equivalent time to absorb it. The 10-year Treasury yield crossed 5% this week for the first time since 2007, raising the return available from government debt, and U.S. Spot Bitcoin ETFs have remained under pressure following the Senate's 49-50 vote against advancing the CLARITY Act on September 15. If October's decision comes with language signaling the end of the tightening cycle, that framing could provide a floor for both tokens. A December dot plot showing further increases would pressure Bitcoin and XRP toward existing support levels. The next scheduled macro test is the Bank of Japan's September 18 decision.