Fed's Williams sees no urgency for next rate hike

Federal Reserve policymakers may only need to implement one more rate hike this year to bring inflation back in line with the US central bank's 2 percent goal, according to New York Fed President John Williams. Speaking at the University at Buffalo on Tuesday, Williams stated that there is "no need for urgency" with the policy actions taken during the September meeting.

He emphasized that watching incoming data before deciding on the next step will provide clearer insights into the economy's performance. Williams suggested that if the economy progresses as forecasted, a single upward adjustment to the federal funds target range could be appropriate late in the year to support a more timely return of inflation to the target.

Financial markets responded positively to Williams' comments, with traders reducing expectations for an October rate hike and pricing for a single increase this year, most likely at the Fed's mid-December meeting. Fed Chairman Kevin Warsh did not comment on his own rate-path expectations. The New York Fed chief's message aims to counter mounting expectations for earlier policy tightening, fueled by hawkish Fed commentary and rising oil prices due to the Middle East conflict.

Williams highlighted the importance of containing inflation and preventing adverse inflationary disturbances from becoming entrenched, stating that the economy's robust growth and healthy job market make price pressures the main focus for monetary policy.