Fed's Williams reportedly sees no need for rate hike in 2027
TLT•New York Fed President John Williams said he still sees a possible need for one more rate hike in 2026, but currently sees no reason to raise rates in 2027. He expects inflation to ease toward the Fed's 2% target next year.
1. Rate outlook
Williams said he has not changed his view that one more rate hike may be appropriate in 2026. For 2027, he said he currently sees no reason to do more, while leaving his outlook open to change as economic data emerge.
2. Inflation expectations
The Fed raised its policy rate by a quarter of a percentage point last month, to a range of 3.75%-4.00%. Williams expects inflation to come down next year and be near the Fed's 2% target for the year as a whole. He cited high energy prices tied to the war in the Middle East and tech-sector investment as factors pushing up near-term inflation, but said he expects energy prices not to add to inflation next year or afterward.
