Goldman Sachs Research previews this week's September FOMC meeting.

"We added a 25bp rate hike at this week's September FOMC meeting to our forecast last Friday following the August CPI report. The report had little impact on our inflation view but pushed market pricing of a hike to nearly 90%, high enough that the FOMC will likely want to avoid the market reaction that would likely follow from remaining on hold.

We continue to expect two cuts in 2027 but now expect them in September and December (vs. June and December previously). We have also raised our forecast for the terminal rate to 3.25-3.5% (vs. 3-3.25% previously)," GS notes.

"The key question for the meeting is whether the median dot will show one hike or two in 2026. We expect a 10-8 majority to show one hike because some participants might be ambivalent about the first hike and some might want to avoid pushing market expectations any higher," GS adds.