- New York Fed President John Williams said another interest rate increase before the end of 2026 could be appropriate as inflation remains above the Federal Reserve’s target.
New York Federal Reserve President John Williams said Thursday that another Federal Reserve interest rate hike before the end of 2026 would be a reasonable possibility as policymakers work to bring inflation back to the central bank’s 2% target.
Williams said policymakers still need to evaluate incoming economic data before deciding on the timing of any additional increase. He made the comments at a conference in London.
The Federal Reserve raised its benchmark interest rate by 25 basis points last week to a target range of 3.75% to 4%. Sixteen of 18 Fed policymakers indicated that at least one additional rate increase could be needed before the end of the year.
Why the Fed Could Raise Interest Rates Again
Williams said inflation remains the central challenge for monetary policy, while the US economy has shown resilience. He also pointed to strong demand related to artificial intelligence and said downside risks to employment have eased.
Williams emphasized that another rate increase is not guaranteed. The Fed will assess inflation, employment, and other economic data before making its next decision.
Market expectations have also shifted toward another increase, with futures pricing showing a roughly 77.5% probability of an October rate hike as of Thursday, according to market data cited in the reporting.
The comments come as Treasury yields remain elevated, with investors closely watching inflation and economic data for clues about the Fed’s next move.