New York Fed President John Williams said he expects one more rate hike in 2026 but no further increase in 2027 as inflation eases. That puts him at odds with traders who are pricing in another move next year.
01Summary
- 01New York Fed President John Williams said on Tuesday he sees one more rate hike, but does not think the central bank will need to raise rates again in 2027.
- 02Williams said he had no reason to believe the Fed would need to do more after that increase, though he said forecasts could change as the data evolve.
- 03Fed funds futures traders are broadly betting on at least one rate rise in 2027, with CME FedWatch data showing about 90% odds of the overnight rate ending 2027 at least half a percentage point higher than now.
- 04Williams said the Fed should watch underlying inflation trends and expects overall inflation in 2027 to be near the Fed’s 2% target.
- 05The Fed raised rates in September for the first time since 2023 and will meet again later this month, with one more meeting due in December.
02Why it matters
His comments matter because they signal how one of the Fed’s key policymakers sees the path for borrowing costs. That affects expectations for loans, mortgages and financial markets as traders and officials try to judge when rate cuts or hikes may come.
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