Williams Keeps Open One More 2026 Fed Rate Hike, Sees No 2027 Need

New York Fed President John Williams said the Federal Reserve could still raise interest rates once more in 2026, while signaling that further increases may not be needed in 2027 as inflation pressures ease.

Williams said tariff and energy shocks are expected to fade, allowing inflation to slow noticeably next year and move closer to the Fed’s 2% target. He also said that improvement could help offset price pressure from investment in artificial-intelligence infrastructure.

The central bank official said the U.S. economy is not broadly overheated and that labor-market conditions are not generating additional inflation pressure. Treasury yields moved slightly lower after the remarks.

The September consumer price index is scheduled for release Oct. 14. The Federal Open Market Committee is scheduled to meet Oct. 27-28.