New York, New York - The US Federal Reserve does not need to raise interest rates with "urgency," but a further increase may be required later this year, warned New York Federal Reserve President John Williams on Tuesday.
The Fed raised the key interest rate for the world's largest economy at its meeting earlier this month, increasing it by 25 basis points to a range between 3.75–4.00% to combat stubbornly high inflation.
Since then, markets have been attempting to forecast the path forward for interest rates, with borrowing costs a key factor for how households and businesses make financial decisions.
"With the policy action we took at our September meeting, there is no need for urgency, and we have time to gather more information," Williams said in an address at the University at Buffalo.
Williams is an influential voice on the 12-member Federal Open Market Committee (FOMC) that votes to set US monetary policy.
"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," he said.
The Fed has a dual mandate to keep inflation to its long-term 2% target while also ensuring maximum employment.
While the labor market has been broadly stable, US households and businesses have been battered by more than five years of higher-than-target inflation.
The central bank managed to bring it down from a pandemic-era peak of around 7.2%, per the Fed's preferred gauge, but it never hit the 2% target and began rising steadily again in 2025.
Inflation has been turbocharged by President Donald Trump's war on Iran, which has sent energy prices skyrocketing.
It has also been fueled by Trump's tariff policies and the ongoing AI boom, which has boosted demand and prices for a slew of goods and services.