DBS Group analyst Philip Wee says the Fed’s Williams backs another rate hike by
end-2026 but would not endorse market pricing for additional tightening in 2027.
Williams stressed the Fed will rely on incoming data rather than any single
print and will be guided by the inflation path over the next 1-2 years. Today’s
CPI should focus on core inflation, expected to ease from 0.3% to 0.2%. Williams
said disinflationary forces remain intact, with price pressure concentrated in
AI-related sectors and energy rather than broad-based; he sees little evidence
of labor-market-driven inflation or U.S. overheating. That distinction is key
for the dollar, whose post-September rally has depended largely on expectations
of further Fed tightening.
