Williams says more rate hike this year is “reasonable”; market probability of a October rate hike rises to approximately 70%

AT A GLANCE

Williams says inflation remains high and that more rate hike this year is a reasonable expectation, but policy depends on subsequent data.

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Fed's "third-in-command" Williams: One more rate hike this year is "reasonable"

BlockBeats news,September 24, New York Fed President Williams said today that U.S. inflation remains significantly above the Fed's 2%target, and that, amid persistently high energy prices and AI investment keeping demand strong, the Fed still has "a great deal of work to do" to bring inflation under control. He believes that another rate hike this year is a "reasonable" expectation, but emphasized that subsequent policy will depend on economic data.

Williams said that the U.S. economy has demonstrated resilience after experiencing major shocks, but continued energy-price pressures and strong demand from AI investment have increased inflation risks. He noted that U.S. inflation has remained above the Fed's target for consecutive 5 years.

The Fed unanimously raised rates by 25 basis points last week, bringing the federal funds rate target range to 3.75% -4%. The latest dot plot shows that, of the 18 officials, 16 expect that at least more rate hike will be needed before the end of 2026. Williams said that every future meeting will make judgments based on the latest economic and inflation data.

The market has also further increased its bets on a October rate hike.CME FedWatch data show that, as of September 24, the market puts the probability of the Fed October raising rates at approximately 70%, up from approximately 54%the previous day.

In addition, Williams said that AI investment has become a new variable on the demand side. Artificial intelligence investment may drive productivity growth in the coming years, but at present AI's actual contribution to overall productivity remains relatively limited.

Original link https://m.theblockbeats.info/flash/368848

Key points

Williams said that U.S. inflation remains significantly above the Fed's 2%target.
Williams believes that another rate hike this year is a reasonable expectation, emphasizing that subsequent policy depends on economic data.
The article states that the Fed unanimously raised rates by 25 basis points last week, bringing the federal funds rate target range to 3.75% -4%。
The article states that the latest dot plot shows that, of the 18 officials, 16 expect that at least more rate hike will be needed before the end of 2026.
The article cites CME FedWatch data as saying that, as of September 24, the market expects the probability of the Fed October raising rates to be approximately 70%, compared with approximately 54%。
Williams said that AI investment may drive productivity growth in the coming years, but its actual contribution to overall productivity remains relatively limited at present.

AI-assisted interpretation

The following is analysis, separate from reported facts. Verify important claims independently.

A rate hike raises the policy rate, changing borrowing costs. Williams' core point is that inflation currently remains above the Fed's target, so another rate hike is possible, but whether action is taken will depend on subsequently released economic and inflation data. The market probabilities in the article represent traders' expectations and do not mean that the Fed has already decided to raise rates.

Why it matters to readers

These remarks and the market probabilities cited in the article reflect the market's attention to the path of U.S. interest rates. If subsequent data or officials' remarks change, current rate-hike expectations may also change accordingly.

Beginners should distinguish between officials' policy assessments, market pricing, and formal decisions: a reasonable expectation is not a commitment, and a market probability of approximately 70%is not a certain outcome.

Risks and unknowns

The content is relayed by BlockBeats; the evidence does not provide the original text of Williams' remarks or official materials from the New York Fed or the Federal Reserve.
The evidence does not provide the CME FedWatch page; the probabilities of approximately 70%and approximately 54%cannot be independently verified.
It cannot yet be confirmed from the evidence whether the Fed will raise rates again this year, or whether it will raise rates in October.
The specific outcomes of subsequent economic and inflation data are unknown.

Williams says more rate hike this year is “reasonable”; market probability of a October rate hike rises to approximately 70%

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