Goldman Sachs expects the Federal Reserve to raise interest rates again in December, as tighter financial conditions are insufficient to alter the policy path.

According to a Goldman Sachs report, the Federal Reserve is expected to pause rate hikes at its October policy meeting, but may implement the final rate increase of this cycle in December. Goldman Sachs noted that since September, the Financial Conditions Index (FCI) has tightened by approximately 30 basis points, a magnitude insufficient to substitute for further rate hikes. Markets should not interpret tightening financial conditions as a signal that the rate-hiking cycle is about to end.