New York Fed President John Williams said Tuesday that there is “no need for urgency” on interest rates. In the same speech, he said one more increase “may be appropriate late this year.” Most of the headlines we saved led with the first half; Reuters’ read “Fed’s Williams sees no urgency for next rate hike.” The two statements sit in adjacent paragraphs in his prepared remarks at the University at Buffalo.
What he said, in both halves
On the wait-and-see side, Williams said: “With the policy action we took at our September meeting, there is no need for urgency, and we have time to gather more information.”
On the other side, he said: “If the economy evolves in a manner broadly consistent with my forecast, one further upward adjustment of the federal funds target range may be appropriate late this year to support a timelier return of inflation to target. But that is just my forecast, and time—and the totality of the data—will tell.”
He also said “getting inflation back to 2 percent is job No. 1.” He said the risk to maximum employment has receded, while the risk to achieving price stability has increased. As the speech was prepared for delivery, he noted that his views “are mine alone and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or others in the Federal Reserve System.”
His forecasts
Williams said he expects real GDP growth to average “about 2-1/4 percent this year and next year.” He expects the unemployment rate to “edge down to about 4 percent over the next year.” He expects overall inflation of “3-1/2 percent this year,” slowing to “just above 2 percent next year” and reaching 2% in 2028. He tied the higher inflation this year to elevated energy and AI-related goods prices. His footnote says his inflation figures are measured by the Personal Consumption Expenditures (PCE) Price Index.
How that lines up with the Fed’s projections
On Sept. 16, the Federal Open Market Committee raised the target range for the federal funds rate by a quarter percentage point, to a range of 3.75% to 4%. The statement says the vote was 12-0.
In projections released with that decision, the median of the 18 Fed policymakers who submitted projections put the federal funds rate for the end of 2026 at 4.1%. The midpoint of the current range is 3.875%. By Plainly Now’s arithmetic, a median about a quarter point above that midpoint is consistent with one more quarter-point increase this year. That is arithmetic on a median, not a claim that every official expects an increase. The median for the end of 2027 is also 4.1%. The June median for 2026 was 3.8%.
What the rate means
The federal funds rate is the interest rate banks charge one another for overnight loans, and the Fed’s target range for it is its main policy tool. In general terms, a quarter-point increase pushes borrowing costs for households and businesses somewhat higher, though how much depends on the loan.
What comes next
Two meetings remain in 2026: Oct. 27-28 and Dec. 8-9. The December meeting comes with a new set of projections. Williams said there was no need for urgency and pointed to “late this year.” His prepared remarks do not name a meeting.
The Bureau of Economic Analysis is scheduled to publish Personal Income and Outlays for August at 8:30 a.m. Eastern on Wednesday, Sept. 30, along with its third estimate of second-quarter GDP. That report includes the PCE price index, the measure Williams’ footnote names for inflation.