BUFFALO, N.Y. — New York Federal Reserve President John Williams said inflation remains too high and another interest rate increase may be warranted later this year, but policymakers can take time to review more economic data before acting.
“With the policy action we took at our September meeting, there is no need for urgency,” Williams said in a speech in Buffalo, according to the Wall Street Journal. “We have time to gather more information.”
The Fed raised its benchmark rate last week for the first time in three years. Before Williams spoke, futures markets indicated roughly a 70% chance of another increase at the October meeting, which would lift the target range to 4% to 4.25%, the Journal reported. The Fed also has a meeting scheduled for December.
‘Might be Appropriate’
Williams, vice chair of the Fed’s policy committee, said another increase “late this year” might be appropriate. His remarks suggested he sees room to wait, even as policymakers’ forecasts point to at least one more increase this year and Fed Chair Kevin Warsh has taken a more forceful stance on inflation, according to the Journal.
The Fed’s preferred inflation measure reached 3.7% in its latest reading for July, well above the central bank’s 2% target. Williams said some underlying pressures appear to be easing: Housing price increases have slowed, and wage gains do not appear to be driving consumer prices higher despite a solid labor market, the Journal reported.
What Others are Saying
Other Fed officials have also indicated that rates may need to rise further without specifying when. Fed Governor Michael Barr said Tuesday that “further policy adjustments are likely to be needed” to bring inflation back to target. Governor Lisa Cook expressed a similar view Monday, according to the Journal.
Before its October meeting, the Fed will receive the September jobs report, due Friday, and a September inflation report expected in two weeks.
