Fed’s Williams Endorses Rate Pause Ahead of January Meeting

New York Fed President John Williams supports keeping interest rates steady, aligning with crypto traders’ expectations that the Fed will not cut rates at the January 2026 meeting.

Speaking in a CNBC interview, Williams said there is no rush to change interest rates right now because the recent cuts have helped the economy. He added that he wants inflation to come down to 2% without harming the labour market, calling it a balancing act.

Williams is the latest Fed official to speak about interest rates after the Fed’s meeting earlier this month, when it made its third rate cut of the year. The Fed now appears likely to pause further cuts, with most officials expecting only one small 25 bps cut next year.

Fed officials don’t all agree on what to do next with the interest rates. Fed Governor Chris Waller said the job market looks weak and may need more rate cuts, but he doesn’t expect inflation to rise again.

 Williams said this week’s job and inflation numbers were affected by the October shutdown. However, the data show that inflation is moving towards the Fed’s 2% goal, and the job market is slowing. As a result, he has decided not to cut rates further for now.

Crypto Traders Split on January Fed Rate Decision

Data from Polymarket shows most crypto traders don’t expect the Fed to cut interest rates at the January 28 FOMC meeting. Right now, there’s a 77% chance rates will stay the same and a 25% chance of a small 25 bps cut.

CME FedWatch data also suggests the Fed will probably keep interest rates the same at the January meeting, with a 77% chance of no change and a 22% chance of a small 25 bps cut.

However, some crypto traders are betting that the Fed will cut rates more than expected in 2026. There is currently a 22% chance of two cuts next year and a 19% chance of three cuts, reflecting uncertainty in the market about future monetary policy.