DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

New York Federal Reserve President John Williams said Thursday that another interest rate hike from the Federal Reserve by the end of the year would be a “reasonable” expectation. His comments kept the possibility of another increase firmly before investors.

Williams delivered his remarks at the London Macro Policy Forum. He pointed to investor sentiment while discussing the potential path of interest rates during the remaining months of the year.

According to Williams, investor sentiment suggests that “it’s likely that another rate hike may be appropriate by the end of the year.” He did not present such an increase as a certainty.

“That seems to me a reasonable way of thinking about it. But we have to see. We’re going to collect the data and do what we did between July and September,” Williams said.

The New York Fed president also said the period of explicit forward guidance was “over.” Under that approach, officials would avoid directly signaling to financial markets what the central bank intends to do at coming meetings.

That position echoes the approach taken by Federal Reserve Chairman Kevin Warsh. Warsh has said the central bank will refrain from directly signaling its intentions to the market before upcoming meetings.

Williams instead emphasized the collection and assessment of incoming economic data. His comparison with the period between July and September reflected the same process he said officials would follow before determining their next move.

The Federal Reserve raised its benchmark interest rate by a quarter percentage point earlier this month. That decision moved the overnight funds rate into a target range of 3.75% to 4%.

Comments from Warsh and other central bank officials after that decision have fueled expectations that another hike could arrive in the coming months. Williams’ remarks added another prominent voice to that discussion.

Market pricing shifted toward a greater likelihood of an October increase. CME Group’s FedWatch tool placed the probability of an October rate hike at 77.5% on Thursday, compared with around 53% on Wednesday.

That change showed investors assigning substantially greater odds to another increase within a single day. Even so, Williams stressed that officials still need to see the data before deciding whether another move is appropriate.

Recent economic figures suggest that the United States economy remains strong. At the same time, inflation remains above 3%, leaving price growth above the Federal Reserve’s stated target.

Boston Federal Reserve President Susan Collins addressed that inflation challenge Wednesday. She warned there was “an increased likelihood” that inflation would remain “notably” above the Federal Reserve’s 2% target.

Federal Reserve Governor Michael Barr also indicated Wednesday that more action could be required. Barr said that “further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion.”

Williams did not commit the Federal Reserve to a particular decision or meeting. He described another hike by year end as reasonable while preserving the central bank’s ability to respond to incoming information rather than providing an explicit advance signal.

The remarks leave investors watching both the economic data and statements from Federal Reserve officials. Market expectations now favor an October increase more strongly, while Williams maintains that the final judgment will depend on information collected before the decision.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.