John Williams, president and chief executive officer of the Federal Reserve Bank of New York, during a Bloomberg Television interview in New York, USA, Tuesday, April 7, 2026.
Michael Ngale | Bloomberg Getty Images
New York Federal Reserve President John Williams said on Tuesday that he does not see additional rate hikes in 2027 after another hike this year.
“I haven’t changed my view that there may be another rate hike,” Williams said in an interview with Bloomberg News. “I don’t think right now I have any reason to believe we should do more.”
Williams’ comments put him at odds with markets and some other members of the central bank.
Fed funds futures traders are generally betting that the central bank will raise rates at least once in 2027, according to CME’s FedWatch data on Tuesday. The latest trades give a roughly 90% chance that the Fed’s overnight rate will end 2027 at least half a percentage point higher than it is now.
The New York Fed chief is also at odds with many members of the Federal Open Market Committee, although he is still in line with the majority. Eight of the 18 rate forecasters for 2027 see further increases after additional hikes 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 in September issued its first rate hike since 2023. Fed officials indicated plans for another hike in meeting minutes, but did not specify when. The central bank meets at the end of this month and once again in December.
To be sure, Williams told Bloomberg that “we’ll have to see” when it comes to predictions in the new year.
“This economy is affected by a variety of influences, and we have to keep watching the data,” Williams said.
‘Disinflation’ trend
Williams said the Fed should look at “fundamental trends” in inflation amid price shocks linked to energy and artificial intelligence.
While the former head of the San Francisco Fed warned that energy prices continue to add pressure on overall inflation, he said it could provide relief every year in the future. Williams also said that the effect of tariffs on price growth is mostly visible.
He said overall inflation for 2027 should be “closer” to the Fed’s target of 2% per year. The personal consumption expenditures price index, the Fed’s preferred measure of inflation, 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. That I don’t think has fundamentally changed,” said Williams. “In fact, the inflation forecast for next year is that inflation will come down a little bit.”
– CNBC’s Matt Peterson contributed to this report.