Goldman Sachs says the bull market can survive Fed rate hikes

TLDR

• Goldman Sachs, JPMorgan, HSBC, and Deutsche Bank all now forecast a quarter-point Fed rate hike at the Sept. 15-16 meeting
• Market odds of a hike jumped to 88-89% after hotter-than-expected August inflation data
• Crude oil crossed $100 a barrel, adding to inflation concerns
• Wall Street strategists say the bull market can survive rate hikes as long as earnings remain strong
• The S&P 500 has historically risen 9% in the 12 months following the first rate hike of a cycle

Major banks have changed their forecasts ahead of this week’s Federal Reserve meeting, with Goldman Sachs, JPMorgan, HSBC, and Deutsche Bank all now calling for a quarter-point interest rate increase.

There will be a rate hike next week, warns Goldman Sachs 🚨 🚨 pic.twitter.com/hpk38SCYEW

- Barchart (@Barchart) September 12, 2026

The shift follows hotter-than-expected August inflation data and a surge in crude oil prices above $100 a barrel, driven by escalating tensions in the Middle East.

Market odds of a hike at the Sept. 15-16 meeting climbed to roughly 88-89%, up from 67-70% before last week’s inflation print. The Fed has held borrowing costs steady all year after a quarter-point cut at the end of 2025.

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