Goldman Sachs said that Wednesday's U.S. inflation data, combined with remarks from New York Fed President John Williams the previous day, has led it to conclude that a Fed rate hike in October is now unlikely.

Economists Jan Hatzius, David Mericle, and Alec Phillips stated in a research note that based on the latest inflation report, they expect core PCE year-over-year growth in the fourth quarter to be 3.0%, significantly below the median FOMC participant projection of 3.4%.

As a result, the bank has pushed back its forecast for a second rate hike to December, while also believing there is a high possibility that the FOMC will ultimately determine no further rate increases are necessary.

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