Fed's Williams: Another Rate Hike Possible Before Year-End

New York Federal Reserve President John Williams said it's reasonable to think the US central bank might need to raise interest rates again before the end of the year. This would help bring down inflation risks, which are currently elevated.

Williams made his comments at a conference in London organized by the National Institute of Economic and Social Research. He emphasized that high levels of uncertainty cloud the economic outlook.

The US central bank recently raised its policy rate to the 3.75%-4.00% range, with 16 out of 18 policymakers signaling that another hike is likely before the end of 2026. Williams stressed that inflation poses a significant challenge for policymakers seeking to balance growth and price risks.

The Fed lifted rates last week to target inflation pressures that have overshot its 2% target for years. These pressures are driven by President Donald Trump's trade tariff agenda and the Middle East war. Fed officials now expect inflation will not be back at target until 2029.