Fed's Williams: Another Rate Hike This Year 'Reasonable' — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- John Williams, New York Federal Reserve President and FOMC vice-chair, said it was "reasonable to think" the central bank might need to raise rates again before year's end to contain inflation risks.
- The Federal Reserve, under new Chairman Kevin Warsh, raised its policy rate to the 3.75%-4.00% range last week, with 16 of 18 policymakers signaling at least one more hike before end of 2026.
- Williams characterized September's rate move as triggered by a "build-up of pressures rather than a sudden change in data" and flagged "high levels of uncertainty" around the economic outlook.
- Futures markets are pricing strong odds of an additional rate increase at the Fed's October policy meeting, with another move also expected in December.
- Fed officials now project inflation will not return to the 2% target until 2029, with Williams calling the return to 2% "absolutely essential" and needing to happen "in a timely manner."
- Williams noted the U.S. and global economies had proven resilient to the energy-price shock from the Iran war, though he called inflation the "big challenge" for policymakers balancing growth and price risks.
Why it matters: Borrowers and equity markets now face a rate-hike cycle the Fed itself doesn't expect to resolve for years — officials project inflation won't hit the 2% target until 2029, and futures are pricing moves at both the October and December meetings, meaning higher borrowing costs extend well beyond what many market participants had penciled in.
Ask SkimNews
