NY Fed's John Williams signals openness to September rate hike

NY Fed's John Williams signals openness to September rate hike NY Fed's John Williams signals openness to September rate hike · Quartz · Bloomberg / Getty Images Cris Tolomia Wed, September 2, 2026 at 7:12 PM GMT+2 2 min read New York Federal Reserve President John Williams signaled Wednesday that he is open to raising interest rates at the Federal Open Market Committee's September 15-16 meeting, a shift from his previous stance favoring a hold on rates. "There's no clear signs right now whether monetary policy currently is sufficient to make sure we bring inflation back to target in the next year or two, or whether you need to see further action to do that," Williams said in a "Squawk Box" appearance on CNBC, speaking with anchor Steve Liesman from the New York Fed's headquarters. He added that recent inflation data had been "encouraging" but that policymakers needed to consider a fuller picture of incoming information.

He rounded out the thought by saying, "We've got to get a full picture and look at all the different pieces of information we have. " Williams, who holds a permanent seat on the FOMC, had until recently been among the Fed's most vocal defenders of keeping rates steady, according to MarketWatch . His comments Wednesday represented a notable shift in tone ahead of what markets consider a pivotal policy decision.

Williams also addressed the recent rise in Treasury yields, attributing it to economic strength rather than market dysfunction. "What's driving it, in large part, is really a strong U. S.

economy and a strong economic outlook fueled by big investments in AI and data centers and technology in general," he said. He described inflation expectations as "well anchored" despite price pressures tied to tariffs and the Iran war. Markets were pricing in roughly a two-in-three chance of a rate hike at the September meeting as of Wednesday morning, per CME Group figures cited by CNBC.

The September meeting follows a fractured July FOMC vote in which the committee held the federal funds rate in a range of 3. 5% to 3. 75%, with three regional bank presidents — Federal Reserve Bank of Cleveland President Beth Hammack, Federal Reserve Bank of Minneapolis President Neel Kashkari, and Federal Reserve Bank of Dallas President Lorie Logan — dissenting in favor of a quarter-point increase.

The minutes from that meeting showed hawkish sentiment extended beyond the three dissenters, with some officials arguing that current financial conditions might not be tight enough to return inflation to the Fed's 2% target. Williams said in early August that he expected inflation to cool and that current policy was "well positioned," though he warned the Fed would act if price pressures failed to ease on a durable basis.