New York Federal Reserve President John Williams sees no reason for further rate hikes in 2027. He still expects one more increase before this year ends.
Futures traders see a steeper path, pricing in 93% odds that rates end 2027 at least 50 basis points higher. Which path the Fed takes could decide how much pressure rates keep on crypto markets.
Why Williams Sees Room to Stop After One More Hike
Williams laid out his view in an interview with Bloomberg News. He expects overall inflation to land near the Fed’s 2% target in 2027.
“I haven’t changed my view that it may be appropriate to have one more rate hike. I don’t think at this time I have any reason to believe that we would need to do more,” he said.
He added that the 2027 path still depends on incoming data. Williams pointed to underlying inflation gauges that have already cooled. The New York Fed’s trend measure sits around 2.3%, and the Dallas Fed trimmed mean is at a similar level.
Energy is still lifting inflation this year, but Williams said it may become a disinflationary force in 2027. For now, AI-driven demand is the inflation driver he is watching most closely.
Williams also serves as vice chair of the Federal Open Market Committee (FOMC). Last month, he said the Fed had no urgency to hike again. October hike odds fell from 70.9% to 47% within a day.
Meanwhile, 8 of the 18 officials who projected 2027 rates expect a further hike beyond this year’s. Cleveland Fed’s Beth Hammack and Dallas Fed’s Lorie Logan see more than one further hike as necessary.
Futures Price a Steeper Path Than Williams
CME FedWatch data now puts October hike odds at 23.8%. Traders instead expect the next move on December 9, with hike odds at 89.8%.
Traders expect tightening to carry well into 2027, with most of it priced for the first half of the year. FedWatch shows the most likely range at each key meeting:
- January: 4%-4.25% (44.8%)
- March: 4.25%-4.5% (43.6%)
- June: 4.5%-4.75% (35.3%)
- December: 4.5%-4.75% (31.7%)
After June, the most likely range holds at 4.5%-4.75% through year-end, 75 basis points above today. A single quarter-point hike from here, which would end 2027 at 4%-4.25%, carries 6.3% odds.
More Hikes or a Hold? What Each Path Could Mean for Crypto
Bitcoin (BTC) trades at $83,453, down 0.18% over the past 24 hours, according to BeInCrypto Markets. That leaves it about 34% below its all-time high of $126,080, set on October 6, 2025.
Higher rates pay savers more on cash and bonds, which can pull money out of riskier assets like Bitcoin. Bitcoin pays no interest, so it loses appeal as those yields climb.
The market’s path would extend that pressure. Hike bets have already lifted the US Dollar Index (DXY) to an 18-month high. The 10-year Treasury yield touched 5.35% on October 8, its highest in 24 years.
Williams’ path points the other way. A hold after one more hike would cap the yield edge of cash and bonds over Bitcoin sooner. Rate moves have not set Bitcoin’s direction on their own, however. Bitcoin rose 13% after the September hike as institutional funds bought back in.
Williams said he had no target in mind for the September Consumer Price Index (CPI) reading, though a lower print would be preferable.
A softer print could cool hike expectations and ease pressure on crypto. The report, due Wednesday, is the last inflation print before October 28.
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