John Williams, president and chief executive officer of the Federal Reserve Bank of New York, during an interview with Bloomberg Television in New York, U.S., Tuesday, April 7, 2026.
Michael Nagle | Bloomberg | Getty Images
New York Federal Reserve President John Williams said Tuesday he does not expect further rate hikes in 2027, following another hike this year.
“I haven’t changed my view that it might be appropriate to do another rate hike,” Williams said in an interview with Bloomberg News. “I don’t think at this point I have reason to believe we should be doing more.”
Williams’ comments put him at odds with the market and some other members of the central bank.
Fed funds futures traders are largely betting that the central bank will raise rates at least once in 2027, according to CME FedWatch data released Tuesday. The latest trading gave about a 90% chance that the Fed’s overnight rate would end 2027 at least half a percentage point higher than it is today.
The New York Fed president also disagrees with many members of the Federal Open Market Committee, although he remains in line with the majority. Eight of the 18 people who gave a rate forecast for 2027 expect another increase after another increase this year. Williams is a permanent voting member of the FOMC, the body that decides where interest rates should be set at each Fed policy meeting.
The Fed announced its first rate increase since 2023 in September. Fed officials indicated in their meeting minutes that they intended another hike, but did not specify when. The central bank meets at the end of this month, then again in December.
Certainly, Williams told Bloomberg that “we’ll have to see” when it comes to forecasts for the new year.
“This economy is affected by many different influences, and we just have to continue to monitor the data,” Williams said.
“Disinflationary” trends
Williams said the Fed should examine “underlying trends” in inflation amid price shocks linked to energy and artificial intelligence.
Although the former San Francisco Fed chief warned that energy prices continued to put upward pressure on overall inflation, he said they could provide relief on an annual basis in the future. Williams also said the effects of tariffs on price growth have been widely observed.
He said headline inflation for 2027 is expected to be “close” to the Fed’s 2% target on an annual basis. The Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, in August showed a 12-month increase of 3.4%, or 3% if food and energy prices are excluded.
“I still believe there are disinflationary forces at play. Ones that I don’t think have fundamentally changed,” Williams said. “In fact, my inflation forecast for next year is that inflation will come down a little bit.”
—Matt Peterson of CNBC contributed to this report.
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