New York Fed President Williams said that it is appropriate to raise interest rates again this year, and if the economic outlook meets expectations, there is no need to raise interest rates in 2027. He supports the decision to raise interest rates in September, citing reasons such as rising energy prices and increased investment in AI infrastructure. Williams pointed out that the Middle East conflict has pushed up energy prices and transmitted them to core inflation, while the demand for AI construction has pushed up labor costs in the commodity and construction industries. Although tariffs, energy prices, and AI demand have led to higher than expected inflation this year, inflation expectations remain stable and core inflation indicators continue to decline. It is expected that inflation will fall back next year and approach the 2% target. Williams believes that as chip production capacity increases and productivity improves, improvements in the AI supply side will curb inflation. The long-term yield of US Treasury bonds is influenced by bond supply and demand, AI investment, fiscal policy, and energy prices.
