Fed Officials Cool Rate Hike Expectations

Two top Federal Reserve officials dampened expectations of an interest rate hike at the central bank's October policy meeting, saying they will take more time to consider evolving economic conditions.

Federal Reserve Bank of New York President John Williams and Vice Chair Philip Jefferson made their comments this week, echoing the view that there is no need for urgency in changing monetary policy. Williams said 'there is no need for urgency' on adjusting the current setting of monetary policy.

Jefferson added that any future adjustments should be determined by carefully examining trends in the data, the evolving outlook, and the balance of risks. He noted that markets are reassessing the outlook amid rising bond market yields, saying 'my colleagues and I will need to come to our own judgment, which may take more time.'

The comments from Williams and Jefferson helped shift expectations, with global brokerages now largely expecting the Fed to hike rates only once more this year, in December.