Business · Economy · 7 hrs ago
Williams sees no need for Fed rate hikes in 2027 after one more this year
New York Fed President John Williams sees one more rate hike as appropriate this year, but says the US central bank may not need to raise rates again in 2027.
He said inflation could slow and move closer to the Fed’s 2% target next year as the effects of tariffs and energy price shocks fade.
Williams also said underlying inflation measures have declined, despite price pressures linked to investment in artificial-intelligence infrastructure.
He supported the Fed’s quarter-point rate increase in September after higher fuel costs changed the near-term inflation outlook.
Some other Fed officials think more increases may be needed, while investors expect a hike in December and two more in 2027.
Williams stressed that the outlook remains uncertain and said policymakers should keep watching the data, including inflation figures due before their October 27-28 meeting.
New York Fed President John Williams said he still considers one more interest-rate increase appropriate this year but sees no need for another in 2027.
He said inflation should slow and approach the Federal Reserve’s 2% target next year as the effects of tariffs and an energy price shock fade.
Williams said underlying inflation measures have declined and he sees no sign that the labor market is adding to inflationary pressure.
Some Fed colleagues have said more than one additional rate increase may be needed to bring inflation back to 2%.
Investors were pricing in a rate increase in December and two more in 2027, according to the articles.
- Who
- New York Fed President John Williams.
- What
- He said one more rate increase may be appropriate this year but that he sees no reason for further increases in 2027.
- When
- Tuesday, October 13, 2026.
- Where
- In an interview with Bloomberg News at the New York Fed.
- Why
- He expects inflation to slow as tariff and energy-price effects fade, while underlying inflation measures have declined.
John Williams
Beth Hammack, Lorie Logan and other Fed officials calling for more increases
Rate outlook
John Williams
Williams said one more increase this year may be appropriate and he sees no need for further increases in 2027.
Beth Hammack, Lorie Logan and other Fed officials calling for more increases
Hammack, Logan and some other officials said more than one additional increase may be needed to return inflation to 2%.
The Fed raised rates by a quarter percentage point, a move Williams said he firmly supported.
Williams said one more rate increase this year may be appropriate but he sees no need for another in 2027.
Policymakers were due to receive a new consumer-price inflation report, described as the last before their October 27-28 meeting.
- Rate outlook
- One more increase may be appropriate in 2026; Williams sees no need for another in 2027
- Inflation target
- 2%
- Fed meeting
- October 27-28, 2026
- Other officials
- Beth Hammack and Lorie Logan said more than one additional increase may be needed
- Market pricing
- Investors anticipated a December increase and two increases in 2027
3 sources
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What people are saying
I don’t think at this time I have any reason to believe that we would need to do more
I firmly supported
This is not an economy that is overheating overall.