NY Fed Readies Rate Hikes if Inflation Fails to Ease

New York Fed President John Williams has signaled that the Federal Reserve is prepared to raise interest rates if inflation does not show clear progress toward the 2% target by 2028.

The current federal funds target range is at 3.50%-3.75%, and three officials dissented in favor of higher short-term borrowing costs at the last meeting of the Federal Open Market Committee.

Inflation remains above the Fed's 2% target, and Williams notes that core inflation data over the next several months will be critical in showing whether price growth is moving onto a disinflationary path consistent with reaching the 2% goal on a sustained basis by 2028.