New York Fed's Williams sees no urgency for October rate hike

September 30, 2026 at 01:22 AM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

New York Federal Reserve President John Williams said on Tuesday he sees no urgency for an interest rate hike in October, after raising rates in September. He expects one more rate hike late this year, likely in December, to support a timelier return of inflation to the Fed's 2% target. Markets had priced in higher odds of an October hike, but those odds dropped to around 50% after his remarks.

Key Facts

Williams said he sees 'no need for urgency' on a rate hike and that 'we have time to gather more information.'
He expects one more rate hike 'late this year,' which many interpret as December rather than October.
Traders' odds of an October rate hike dropped from 70% on Monday to around 50% on Tuesday.
Williams sees inflation of 3.5% this year and says the inflationary impact of the AI-related demand shock is increasingly salient.

Williams's Rate Outlook

Speaking in Buffalo, N.Y., Williams said that after raising rates in September, he sees no need for urgency and that the Fed has time to gather more information. He stated that the accumulation of more data should provide greater clarity on underlying economic trends and the appropriate setting of monetary policy. Williams expects one more rate hike late this year to support a timelier return of inflation to the Fed's 2% target. His outlook aligns with the median forecast of the rate-setting committee, which also sees one additional rate hike this year.

Market Reaction

Markets had priced in higher odds of a rate hike at the Fed's next meeting on Oct. 27-28. On Monday, traders saw a 70% chance of an October rate hike, but those odds dropped to around 50% as of Tuesday. Williams is vice chair of the Federal Open Market Committee and a member of the troika of Fed leadership.

Inflation Assessment

Williams sees inflation of 3.5% this year and notes that the inflationary impact of the AI-related demand shock is increasingly salient. He now expects somewhat larger and longer-lasting effects from energy prices on inflation, a shift from earlier this spring when he had anticipated oil prices would come down this year.