How Wall Street and China's Major Brokers See the Fed's 2026 Rate Path

Overseas institutions 1) Goldman Sachs: Now looks for another hike in October Goldman Sachs said the Federal Reserve's hawkish signal on Wednesday has shifted its base case to an additional 25 bps increase in October, making it among the first major Wall Street banks to call for back-to-back hikes. The bank had previously argued the Fed finished this tightening phase after the September 25 bps move. Goldman pointed to the updated dot plot, where most policymakers pencil in at least one more hike this year, implying a baseline of two hikes in 2026. It said October is the most likely window, as officials framed further tightening as a way to return inflation to the 2% target "more promptly." Goldman added the message came in more hawkish than expected, citing the rate projections, a higher estimated neutral rate, and Chair Powell's repeated description of the move as merely "removing some degree of accommodation." Bank of America Global Research also expects a more aggressive path, projecting hikes in both October and December. 2) Barclays: Fed move makes a BOJ hike "almost inevitable" The Financial Times reported Asian currencies weakened on Thursday after the Fed delivered its first rate hike in three years, intensifying pressure on the Bank of Japan ahead of decisions on how far to tighten policy. Since the Fed decision, the yen has fallen more than 1.1%, while the U.S. dollar has risen 0.7% against a basket of major trading-partner currencies. Mitul Kotecha, Barclays' head of Asian FX and emerging markets macro strategy, said the moves put Asian currencies at a disadvantage and make a BOJ rate hike "almost inevitable." RBC Capital Markets' Asia macro strategist Abbas Keshvani said the region faces a double hit: as an energy-importing bloc, it also contends with the dollar's increased appeal during a Fed hiking phase, leaving many Asian central banks struggling to keep pace. 3) BlackRock: Markets may be reading too much into Powell's wording Jean Boivin, head of the BlackRock Investment Institute, wrote that investors may have overinterpreted Chair Powell's language at the post-meeting press conference. Boivin said the rate increase helps bolster the new chair's credibility. He noted Powell's emphasis on U.S. economic strength was a key feature of the briefing, which markets treated as a hawkish signal. Boivin argued that in a strong-growth environment, rate hikes are not necessarily negative for risk assets, adding that investors should distinguish between protecting credibility and the start of a sustained hiking cycle. 4) PGIM: The bar for additional hikes is not high PGIM's chief U.S. economist Robert Solkin said the latest meeting suggested the Fed could deliver three hikes with only a modest push, and potentially more if needed. He described the hike as hawkish, with policymakers signaling another increase this year. Of 18 officials submitting projections, eight see this tightening cycle resulting in three hikes by end-2027. Solkin highlighted Powell's remark that the Fed had "reversed some of the accommodative measures," which he said sounded like Wednesday's move was only an initial step toward tighter financial conditions. Solkin added the risk of additional hikes remains elevated if inflation stays high. 5) SOLLINDA Capital Management: A mildly hawkish read could cap long-end yields near term Justin Greenhill, CIO of SOLLINDA Capital Management, said the press-conference signals were clearly hawkish and may help temper the recent rise in long-term bond yields in the near term. He said the equity-market impact is less clear, but expects small caps to lag large caps as financial conditions tighten further. 6) DBS: A Fed hike doesn't automatically mean a durable dollar upcycle DBS FX strategist Philip Wee said the Fed's hike does not necessarily signal a sustained dollar uptrend. "This is not a U.S.-led tightening cycle like the one in 2022," he said, arguing the Fed is catching up with other major central banks to contain inflation risks and prevent energy price shocks from triggering broader second- and third-order effects. Wee added that the U.S. Treasury market remains a key drag on confidence, with persistent strength in 10-year and 30-year yields showing the long-term borrowing-cost debate is unresolved. DBS expects the U.S. Dollar Index (DXY) to trade within the 96–102 range that has held since mid-2025. 7) Principal Asset Management: Even doves are shifting; at least one more hike may be needed Seema Shah, chief global strategist at Principal Asset Management, said the market discussion has moved from whether rates rise again to how many additional hikes may be ahead. She argued the unanimous vote shows higher energy prices and sticky inflation have pulled even dovish members onside, making a "one-and-done" outcome unlikely. With markets already pricing multiple hikes, she said policymakers may need to deliver at least one more increase to maintain credibility. 8) Oxford Economics: Limited second-round inflation effects point to a BoE hold Oxford Economics expects the Bank of England's Monetary Policy Committee to keep rates unchanged, citing muted second-round inflation effects. It forecasts Greene, Peers and Mann will still vote for a hike, leaving the hold decision at 6–3. While higher oil and gas prices remain an upside risk, Oxford expects most members to stay patient, maintaining a hawkish bias rather than tightening immediately. China-based institutions 1) CICC: No fundamental case for large, consecutive hikes China International Capital Corporation (CICC) said the Fed's statements and current fundamentals do not support back-to-back, sizable rate increases (three or more), unless oil prices spiral out of control. CICC argued high rates will progressively transmit into tighter financial conditions and slow growth, creating a "reflexive" constraint on further big hikes. It cited the U.S. 30-year mortgage rate nearing 7% as evidence. 2) CICC: Gold support seen at $4,200–$4,500 CICC said the Fed has more room to pause than to hike, and described the current setup as resembling a call option with uncertain upside. Using a static framework based on U.S. Treasury yields and the dollar, it estimates gold support around $4,200–$4,500. Absent a string of consecutive hikes, downside pressure on gold should be limited, it said, while meaningful upside would require a broader narrative. A Fed pause could strengthen themes such as eroding trust and de-dollarization, while hikes weaken that storyline and cap upside without additional catalysts. 3) CITIC Securities: Another 25 bps this year, then on hold next year CITIC Securities said the Fed raised rates by 25 bps in September as expected, lifted this year's growth and inflation forecasts, and reinforced a hawkish stance via the dot plot and Walsh's remarks. With market expectations already firm, CITIC said the hike was the path of least resistance. It expects the speed and scale of future hikes to hinge largely on oil prices, which are hard to forecast. With headline inflation likely to fall noticeably by early next year, the case for additional hikes should weaken. CITIC projects one more 25 bps hike this year and a hold next year. It also expects U.S. financial conditions to remain tight, urging investors to favor fundamentally supported assets rather than trades reliant on liquidity. 4) Huatai Securities: October urgency fades; base case is a December hike Huatai Securities said the September hike is now done, and December is the next key window for substantive debate. Whether the Fed is entering a true hiking cycle still depends on incoming data and further guidance from officials. While markets price more than a 50% chance of an October hike, Huatai expects fading fiscal support, oil-driven pressure on household consumption, and tighter financial conditions to cool employment and inflation readings over the next one to two months, reducing the need to move in October. Its base case is a hike in December. The policy path through 2027 will hinge on future data, especially whether the labor market continues to improve, reigniting wage growth, and how inflation evolves. 5) China Galaxy Securities: Compute-network buildout lifts optical-fiber demand amid structural shortages China Galaxy Securities said the buildout of computing power networks, combined with AI-driven demand, is significantly boosting optical-fiber demand. It said growth opportunities are emerging both from backbone network expansion and from upgrades to optical interconnect architectures inside data centers. The firm sees a tightening supply-demand balance ushering in a high-prosperity phase for the sector. It described the current market as a structural shortage where demand growth far outstrips supply expansion, and expects the gap to widen. For leading players with high self-sufficiency in preform production, price increases should translate into meaningful profit leverage. China Galaxy added that the optical-fiber industry is shifting from a traditional cyclical telecom market toward a higher-growth computing-infrastructure segment.