Williams: Fed May Not Need 2027 Rate Hikes — SkimNews
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- John Williams told Bloomberg he sees one more increase this year as potentially appropriate but has "no reason to believe" the Fed would need to do more, putting him at odds with futures traders.
- Fed funds futures traders are pricing in roughly 90% odds that the overnight rate will end 2027 at least a half percentage point higher than today, per CME's FedWatch data.
- Eight of 18 FOMC members who submitted 2027 projections pencil in one more rate increase after another this year, placing Williams at odds with many colleagues though still aligned with the majority.
- The Fed issued its first rate increase since 2023 in September, with meeting minutes indicating plans for another hike but no specified timing.
- Williams said inflation for 2027 should run "near" the Fed's 2% target, citing ongoing disinflationary forces, though August PCE showed a 3.4% 12-month increase (3% excluding food and energy).
- The Fed has two remaining meetings this year — at the end of this month and in December — where the next move could be decided.
Why it matters: Williams is a permanent FOMC voter publicly breaking with futures traders pricing 90% odds of the overnight rate rising at least half a point by end-2027. With eight of 18 officials already penciling in another increase and two meetings left this year, his dovish 2027 stance highlights internal disagreement over the path after the first rate hike since 2023.
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