New York Fed President John Williams said he sees one more rate hike as appropriate this year but currently sees no need for another in 2027. Treasury yields and the dollar moved lower after his comments, which Bloomberg News reported.
New York Federal Reserve President John Williams still sees one more interest-rate hike as appropriate this year, but at the moment does not expect the central bank to need to raise rates again in 2027. Bloomberg News reported the remarks on Tuesday, citing an interview with Williams.
Inflation seen approaching the 2% target
Williams told Bloomberg News that there are still signs inflation will slow considerably and approach the Fed's 2% target next year. The comments bear on the 2027 rate hike question.
He also said the rate path will be about maintaining a balanced economy. Williams is not seeing broader price pressure outside AI and energy, and he sees no sign the labor market is contributing to inflation.
Yields and the dollar slip
Treasury yields moved lower after the comments. The 10-year yield fell 2.7 basis points to 5.217%, while the 30-year slipped 3.7 basis points to 5.561%. The 2-year yield was unchanged at 4.795%.
The dollar index also extended losses, trading down 0.36% at 102.17.
Investinglive noted that markets see only a 14% chance of a Fed rate hike between now and the end of the year, and a 19% chance for October. The outlet also pointed to the word "currently" in Williams' remarks: if price pressures remain stubborn, his assessment can change.
Sources: Reuters via Investing.com, Investinglive
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