Williams Indicates Potential Rate Hike Before Year-End

New York Fed President John Williams suggested that another rate hike could be appropriate by the end of this year, but emphasized that there is no need to rush.

Williams made his comments during a speech at the University at Buffalo in New York on the 29th local time. He stated that if the economy evolves broadly in line with his expectations, it may be appropriate to adjust the target range for the federal funds rate upward one more time later this year to ensure inflation returns to target in a timely manner.

The Federal Reserve raised the benchmark interest rate by 25 basis points on the 16th to a range of 3.75 to 4.00 percent, marking the first hike since 2023. Following Williams' speech, the probability of a rate hike priced into the federal funds futures market for the Federal Open Market Committee meeting scheduled from October 27 to 28 dropped from 70.9 percent to 50.4 percent.