Bonds & Rates
Home›Bonds & Rates›Central Banks›John Williams calls another 2026 Fed hike “reasonable”…
John Williams calls another 2026 Fed hike “reasonable” but won’t commit
Fed funds futures are pricing an October hike probability of about 77.5%, up from roughly 53% a day earlier, after Williams said policymakers will wait for incoming data rather than signal moves.
New York Fed President John Williams said that another interest-rate hike before the end of 2026 is a “reasonable” expectation, reinforcing the view that September’s increase may not be the last move of the year. Speaking Thursday at the London Macro Policy Forum, Williams noted that market participants increasingly see another hike as likely.
Williams, however, stopped short of endorsing an October rate move, saying policymakers need to gather incoming data and weigh the evidence. He pointed to how decisions were handled between July and September, and stressed that the next step will depend on what inflation, growth, and labor-market indicators show in the coming weeks.
The remarks also reinforced the Fed’s shift away from explicit policy signalling, with Williams saying the era of forward guidance is “over.” Instead of pre-committing, policymakers will let data determine whether and when further tightening is required.
Williams said inflation remains the “big challenge” and that the Fed needs not only to bring inflation back to 2%, but to do so “in a timely manner.” He added that the US and global economies have shown resilience to higher energy prices, reducing the immediate growth trade-off from additional tightening, according to Action Forex.