Williams says Fed may not have to hike rates in 2027, at odds with traders

New York Fed President John Williams said one more rate hike may be appropriate this year and he sees no need for more in 2027, which puts him at odds with fed funds futures traders, who largely bet on at least one increase next year. CME FedWatch data showed about 90% odds that the overnight rate would end 2027 at least half a percentage point higher. Eight of the 18 FOMC members who gave a 2027 rate forecast see one more increase after this year's hike. Williams said disinflationary forces remain and inflation should be near the Fed's 2% target in 2027, though energy prices still add pressure, with PCE inflation at 3.4% in August (3% excluding food and energy).

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