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Fed's Williams says one more rate hike in 2026, none needed in 2027

New York Fed president signals end to tightening cycle as inflation pressures ease despite energy and AI-related headwinds.

What to know

  • Williams expects one final rate hike in 2026 but signals the end of the Fed's tightening cycle, with no hikes needed in 2027.
  • He argues underlying disinflationary forces remain in play despite near-term pressures from energy costs and AI infrastructure investment, with inflation expected to reach the Fed's 2% target by end of 2027.
  • The comments reshape market expectations after traders had priced in multiple hikes; Williams previously stated in late September that only one more hike was likely in 2026.

“This is not an economy that is overheating overall. This is not an economy where it's adding inflationary pressures beyond these particular shocks that we're experiencing.”

John Williams, New York Federal Reserve President · Bloomberg News / Investing.com ↗ · Oct 12

John WilliamsJohn Williams New York Federal Reserve PresidentKevin WarshKevin Warsh Fed Chairman

Fed's Williams says one more rate hike in 2026, none needed in 2027
Investing.com News

How it unfolded 2 developments, newest first · click a bar or a number to jump articlesvideosposts

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yesterday8 AM4 PMnow · 3:39 AM ET
  1. 1

    Williams cites disinflationary forces despite energy and AI pressures

    Williams tells Bloomberg he expects inflation to ease toward the Fed's 2% target, arguing that price pressures from tariffs, energy prices tied to Middle East war, and tech sector investment have not fundamentally reversed the disinflationary trend. He states the economy is not overheating overall.

    “I still believe there's disinflationary forces at play…My forecast for inflation for next year is inflation to come down quite a bit — overall inflation to be near our 2% target for the year as a whole next year.”
    — John Williams
    • Watch Fed's Williams Says One More Rate Hike This Year Is Appropriate - Bloomberg https://www. bloomberg.com/news/videos/2026 -10-13/fed-s-williams-expects-one-more-hike-this-year-video?utm_source=flipboard&utm_medium=activitypub Posted into Bloomberg Television @ bloomberg-television-bloomberg

      bloomberg@flipboard.comMastodon12h agoview on Mastodon ↗
  2. 2

    Williams tells Bloomberg one more 2026 hike appropriate, no hikes needed in 2027

    New York Fed President John Williams reaffirms in a Bloomberg News interview that one more rate hike may be appropriate in 2026, but says he currently sees no reason to believe the Fed would need to raise rates further in 2027. He notes the outlook remains uncertain and policymakers must continue monitoring economic data.

    “I haven't changed my view that it may be appropriate to have one more rate hike in 2026…I don't think at this time I have any reason to believe that we would need to do more.”
    — John Williams
    1. first by Investing.com News, 13h ago · also Seeking Alpha, CNBC

      2 more headlines
    2. first by Bloomberg Tech, 13h ago · also Investing.com News

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