Fed's Williams says another U.S. rate hike this year is reasonable
TLT•New York Fed President John Williams said another U.S. rate hike before year-end is a reasonable possibility, while stressing that officials will assess incoming data. The Fed's policy rate is 3.75%-4.00%, and 16 of 18 policymakers signalled at least one more hike before the end of 2026.
1. Another hike possible
Williams said it was reasonable to think the Fed might need to raise interest rates again before the end of the year to help bring down inflation risks. He said officials would collect data and assess it, while noting high uncertainty around the economic outlook.
2. Inflation remains a challenge
Williams called inflation the “big challenge” for policymakers balancing growth and price risks. He said the Fed wants inflation to return to its 2% target in a timely manner.
3. Policymakers signal further hikes
The Fed raised its policy rate last week to a range of 3.75%-4.00%. Sixteen of 18 policymakers signalled that the Fed would probably need at least one more rate hike before the end of 2026, while futures markets showed strong odds of increases in October and December.
