Williams says year-end Fed rate hike could be reasonable

New York Federal Reserve President John Williams said another interest rate increase before the end of 2026 could be appropriate, describing that prospect as reasonable while stressing that the Federal Reserve would wait for incoming data before deciding whether or when to act. Speaking Thursday at a conference in London, Williams said market expectations for another increase this year were a reasonable way to think about the outlook. He added that policymakers would collect data and follow the approach they used between July and September. His remarks did not commit the Fed to raising rates at its October meeting. Market pricing for an October increase rose after the comments. CME Group’s FedWatch tool showed a 77.5% probability of an October move on Thursday, up from about 53% the previous day, according to reports. The figure reflects a market estimate, not a decision by the Federal Open Market Committee, which sets U.S. interest rates. The Fed raised its benchmark rate by 25 basis points earlier in September, setting a target range of 3.75% to 4%. That increase followed a period in which rates had been held steady.