Goldman Sachs predicts the Fed will pause rate hikes in October and implement the final rate hike in December. Goldman Sachs expects the Federal Reserve to pause rate hikes at its October meeting and implement the final rate hike of the current cycle in December. Goldman Sachs points out that the Financial Conditions Index (FCI) has tightened by about 30 basis points since September, insufficient to replace a rate hike. Goldman Sachs expects US inflation to improve in 2027, and in its baseline scenario, the Fed will not raise rates in March 2027. However, escalating tensions in the Middle East driving up oil prices will still affect the subsequent policy path. AI Interpretation: This forecast clarifies the Fed's ultimate monetary policy path: to completely lock in the inflation target through subsequent rate hikes. The tightening of financial conditions has not yet reached the threshold for replacing a rate hike, forcing the Fed to maintain a tight stance to ensure policy effectiveness. External shocks from oil price volatility increase the complexity of inflation management, further solidifying the long-term trend of a high-interest-rate environment. The market needs to abandon illusions of short-term rate cuts and reprice the Fed's determination to maintain high interest rates over a longer period.