Investing.com -- Goldman Sachs expects the Federal Reserve to raise interest rates by 25 basis points at its September 16 FOMC meeting without signaling additional hikes ahead.

The firm added the rate increase to its forecast following the August CPI report. While the inflation data had minimal effect on Goldman's inflation outlook, market pricing for a hike reached 90%, suggesting the FOMC will likely proceed to avoid negative market reaction from holding steady.

Goldman anticipates the FOMC will refrain from indicating further rate increases through several channels. The statement is expected to exclude guidance on the future path or criteria for additional hikes. During the press conference, Chair Warsh may indicate the committee will "carefully assess" incoming data or await multiple inflation reports before deciding next steps.

The dot plot is projected to show a 10-8 majority favoring one hike, with a possibility of a majority supporting two hikes if more participants view this week's move as a standard response to higher oil prices.

Goldman raised its terminal rate forecast to 3.25%-3.5% from 3%-3.25%. The firm continues to expect two rate cuts in 2027, now projected for September and December rather than June and December.

Goldman forecasts a 0.6% increase in core retail sales for August, above the 0.4% consensus. The firm attributes 0.4 percentage points of this strength to a rebound in the nonstore retailers category, which was weak in July due to an online shopping holiday occurring in June this year.

Core CPI prices rose 0.29% in August and 2.45% over the past year. Wireless phone service prices contributed 10 basis points to the core increase, while airfares added another 4 basis points due to higher oil prices.

Goldman estimates core PCE prices increased 0.26% in August and 3.16% year-over-year after accounting for upcoming methodological changes.