Kazuo Momma and Goldman Sachs Assess Likelihood of Rate Hikes
Former Bank of Japan executive director Kazuo Momma put the probability of an October key rate hike at 20–30%. Goldman Sachs forecasts another Fed rate hike on October 27, 2026, while Goldman Sachs and J.P. Morgan had already revised their forecasts to favor a September hike.
Sources
· 5Экс-чиновник Банка Японии оценил вероятность повышения ставки в октябре в 20-30%
1Goldman Sachs прогнозирует ещё одно повышение ставки ФРС в 2026 году при падении цен на нефть
2Goldman Sachs и JPMorgan ожидают повышения ставки ФРС 15-16 сентября
3Банк Японии, по данным источников, склоняется к повышению ставки на 0,25 п.п. 18 сентября
4BOJ Rate Hike in October Is Real Possibility, Ex-Official Says
5Key points
- Kazuo Momma put the probability of a Bank of Japan rate hike in October at 20–30% and called it a possible second consecutive hike.
- Goldman Sachs expects another Fed rate hike at the October 27, 2026 meeting amid a sustained decline in oil prices.
- Goldman Sachs and J.P. Morgan had earlier revised their forecasts and expected a 25-basis-point Fed rate hike on September 15–16.
- The Bank of Japan's core inflation measure accelerated to 2.6% in August from 2.3% in July.
- The mimile.kz archive reported that the Bank of Japan was leaning toward a 0.25 percentage point rate hike to 1.25% at the September 18 meeting.
What happened
Former Bank of Japan executive director Kazuo Momma said the probability of a key rate hike at the October meeting is 20–30%, and that would be the second consecutive hike. In his assessment, the baseline pace of hikes is likely to be once every three months, but there is a reasonable probability of hikes at consecutive meetings. The Bank of Japan's policy focus has shifted to preventing inflation from exceeding the 2% target, and the core inflation measure accelerated to 2.6% in August from 2.3% in July.
The bank identifies a sustained decline in oil prices as the key condition that would slow inflation; Goldman expects Brent crude to fall to $85 per barrel by December, and it is now down nearly 13% from a recent peak to around $98.44. Earlier, Goldman Sachs and J.P. Morgan expected a 25-basis-point Fed rate hike at the September 15–16 meeting, revising their previous forecasts of no change after August inflation data came in above expectations and oil prices exceeded $100 per barrel.
Why it matters
The Bank of Japan's core inflation accelerated to 2.6% in August after 2.3% in July, above the 2% target. Goldman Sachs's Fed forecast is based on slower inflation from falling oil prices: Brent is expected to cost $85 per barrel by December. Markets assessed the probability of a quarter-point Fed rate hike in September at 87%, compared with about 70% before the inflation data.
What changed
The mimile.kz archive previously reported that the Bank of Japan was leaning toward a 0.25 percentage point key rate hike to 1.25% at the September 18 meeting. Now Momma estimates the probability of an October hike at 20–30% and calls it a possible second consecutive hike.
Who's affected
The forecasts affect the Bank of Japan and the Federal Reserve System, as well as investment banks Goldman Sachs and J.P. Morgan, whose rate assessments are cited in the materials. Goldman Sachs expects Brent to fall to $85 per barrel by December, which would ease inflationary pressure.
What to watch
The Fed meeting at which Goldman Sachs expects a hike is scheduled for October 27, 2026. The Bank of Japan will hold its October meeting, at which Momma estimated the probability of a hike at 20–30%.
What's Next
The Federal Reserve meeting on October 27, 2026, and the Bank of Japan's October meeting.