One More U.S. Interest-Rate Increase May Be Appropriate, Fed's Williams Says

By Jessica Coacci

It may be appropriate for the Federal Reserve to raise interest rates once more this year, according to New York Fed President John Williams, but he left open the possibility of further boosts in 2027.

"I haven't changed my view that it may be appropriate to have one more rate hike," Williams said to Bloomberg on Tuesday. "I don't think at this time I have any reason to believe that we would need to do more. But you asked 2027, we'll have to see," he added.

Regarding the inflation outlook, Williams said the one thing he is watching the closest is artificial-intelligence-driven demand, but he doesn't see other emerging drivers of inflationary pressure.

"We definitely had the effects of tariffs and the energy prices and now AI, but some of those are not indicating upward movement in underlying inflation," Williams said.

"In fact, these measures of underlying inflation have come down," he said.

The central bank unanimously voted to raise interest rates by a quarter-point at September's meeting, which Williams said was influenced by energy prices remaining elevated for longer, and demand tied to the AI buildout.

"With a little bit more of a demand driver from AI pushing the economy to grow faster, at least in the near term, that suggested that an adjustment to monetary policy would not only help on the inflation front, but clearly that the economy could withstand a little bit higher interest rates," Williams said.

Write to Jessica Coacci at jessica.coacci@wsj.com

(END) Dow Jones Newswires

October 13, 2026 16:07 ET (20:07 GMT)