Fed Rate Hike Not Urgent: Williams Downplays Market Expectations

New York Fed President John Williams said there is no urgency for another rate hike from the Federal Reserve, which he still expects to happen before year-end.

Williams emphasized that policymakers should wait for more data before deciding on the next step, saying 'this should provide greater clarity' about the economy's performance.

The central bank raised its overnight target range by a quarter-percentage point to 3.75%-4.00% in September, and financial markets have been pricing in a strong chance of another increase in October.

However, Williams tempered this expectation, saying 'there is no need for urgency' after the policy action taken at the last meeting.

The Fed has been raising rates to combat inflation, which has exceeded its 2% target for more than five years. Price pressures have intensified this year due to President Donald Trump's trade tariffs and surging energy costs linked to the Middle East war.

Chicago Federal Reserve President Austan Goolsbee warned that allowing inflation to remain above target for 5½ years is 'playing with fire', adding that policymakers may need to respond to supply shocks with lasting effects.