Fed's Williams: One More Rate Hike This Year is Appropriate; No Need for Increases by 2027

Federal Reserve Governor Williams said one additional rate hike this year is appropriate and sees no need for further increases by 2027. He noted there are no signs that the labor market is driving inflation, with price pressures not widespread outside of AI and energy sectors. Williams indicated that as the impacts of tariffs and energy price shocks fade, inflation will slow significantly and approach the Fed's 2% target next year. Combined with other signs of cooling core inflation, he believes this should help offset price pressures from AI infrastructure investment.