Fed May Not Need Another Rate Hike This Year: John Williams
New York Federal Reserve Bank President John Williams says the Fed doesn't need to rush into raising interest rates again after the September increase. He believes one more rate hike this year will be sufficient to bring inflation back towards its 2% target, but only if economic data supports it.
Williams made his comments at an event in Buffalo, New York, where he also emphasized that waiting for incoming data before deciding on the next policy move 'will provide greater clarity' on the condition of the US economy.
The Fed raised its benchmark interest rate by 25 basis points to a range of 3.75%-4.00% two weeks ago, and most officials signalled at the time that another increase would still be needed this year. However, rising oil prices due to the conflict in the Middle East prompted markets to increase expectations of an earlier rate hike.
Williams' comments immediately affected market expectations, with participants cutting their previously strong bets on an October rate hike and now expecting only one rate increase this year, most likely at the Fed's mid-December meeting.