Global Economics Wrap Up

Economics Research 9 October 2026 | 2:52PM EDT

Global Economics Wrap-Up: October 9, 2026

Global Economics Joseph Briggs | 10/9/26 1:49PM ET Goldman Sachs & Co. LLC

n Strong US services in September final PMIs: Andrew Tilton | o The global composite PMI rose by +0.9pt in September to 53.4, reflecting Goldman Sachs (Asia) L.L.C.

increases in both manufacturing (+0.6pt to 53.0) and services (+0.9pt to Katya Vashkinskaya | 54.5). Goldman Sachs International o The S&P US services PMI saw a broad-based improvement in September, Jessica Rindels | rising by +2.3pt mom to a post-pandemic high of 58.8. Goldman Sachs & Co. LLC o The global employment PMI component rose by +0.8pt for manufacturing Sarah Dong to 51.4 and rose by +0.3pt for services to 52.1. | Goldman Sachs & Co. LLC

o The global manufacturing input price PMI rose by +1.3pt to 61.0 and the output price PMI rose by +0.4pt to 54.8.

US Economics 10/9/26 1:38PM ET

n The minutes to the September FOMC meeting and recent commentary from Fed officials suggest that a rate hike at the October FOMC meeting is unlikely: o In the minutes to the September FOMC meeting, “most” participants assessed that another rate hike would likely be “appropriate by year end,” though they stressed the Committee would approach each meeting with “an open mind.” o Fed Governor Waller suggested on Thursday that he expects two additional rate hikes to be appropriate, but that “the hikes do not need to come at consecutive meetings, but they should be in place in an acceptable period of time.” o Fed Vice Chair Jefferson said last week that “any future adjustments in policy should be determined by carefully examining trends in the data, the evolving outlook, and the balance of risks.” o New York Fed President Williams said last week that “with the policy action we took at our September meeting, there is no need for urgency, and we have time to gather more information.” o We continue to expect one additional 25bp rate hike in December, which would raise the funds rate to 4-4.25%.

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Goldman Sachs Global Economics Wrap-Up

n We assessed the impact of higher rates on the US economy: o Interest rates have risen sharply this year, tightening financial conditions noticeably and raising the question of how much this will weigh on activity. o Higher rates should weigh most heavily on residential investment by further cooling housing demand and deepening the effects of mortgage rate lock-in. o We expect higher rates to subtract about 2pp from annualized residential investment growth in 2026Q4 and 1pp on average in 2027. o Higher rates weigh on consumer spending mainly by dampening credit-financed demand for durable goods such as motor vehicles. o On net, we estimate that higher rates will slow consumer spending growth by about 0.2pp in 2027. o Higher funding costs weigh on business investment as companies devote a larger share of revenue to interest expense when refinancing maturing debt at higher rates. o We expect a drag on 2027 capex growth of about 0.3pp from this channel. o Adding up the effects on housing, consumption, and capex, we expect higher rates to subtract about 0.2pp from GDP growth in 2027, leaving the economy still growing close to our 2.3% potential growth estimate. o If current rates persist instead, we estimate the drag would rise to slightly over 0.5pp.

Europe Economics 10/9/26 12:17PM ET

n We downgrade French growth: o The surge in France’s borrowing costs has led to a significant tightening in financial conditions. o The effect of tighter financial conditions on growth tends to be less acute in France than elsewhere in Europe. o That said, the tightening in financial conditions partly reflects the renewed increase in policy and political uncertainty. o Moreover, the increase in interest payments hides the fact that fiscal policy will likely be contractionary next year. o Our tracking estimate for Q3 stands at 0.09%qoq; we forecast subdued growth of 0.4% in 2026 (unchanged) and 0.6% in 2027 (vs. 0.7% previously). n…