From CNBC · Alex Harring · · 1m 30s
Williams says Fed may not hike rates in 2027
New York Fed president John Williams breaks with market expectations and most colleagues on interest rate policy next year.
In brief
New York Fed president John Williams breaks with market expectations and most colleagues on interest rate policy next year. New York Federal Reserve President John Williams said the Fed may not need to raise rates in 2027 after one more increase this year, putting him at odds with traders and most FOMC members…
Williams sees no need for 2027 hikes
New York Federal Reserve President John Williams said Tuesday he doesn't see additional rate hikes in 2027 after one more increase this year.
“I don't think at this time I have any reason to believe that we would need to do more.”
Williams at odds with market traders
Fed funds futures traders are betting the central bank will raise rates at least once in 2027, with about ninety percent odds the overnight rate ends the year at least half a percentage point higher.
Most FOMC members disagree with Williams
Eight of eighteen Federal Open Market Committee members who gave a rate forecast for 2027 see one more increase after an additional hike this year. Williams is a permanent voting member of the FOMC.
Williams cites disinflationary forces
Williams told Bloomberg the Fed should look at underlying trends in inflation amid price shocks tied to energy and artificial intelligence. He forecasts inflation for next year to come down quite a bit.
“I still believe there's disinflationary forces at play. Those I don't think have fundamentally changed.”
Williams cautious on 2027 forecasts
Williams told Bloomberg we'll have to see when it comes to forecasting into the new year, saying the economy is affected by lots of different influences and the Fed must keep watching the data.
“This economy is being affected by lots of different influences, and we just have to keep watching the data.”
The short version
New York Federal Reserve President John Williams said the Fed may not need to raise rates in 2027 after one more increase this year, putting him at odds with traders and most FOMC members.
