Bond yields are climbing — but Fed’s Williams calls it good news
“It’s not really about financial conditions affecting the economy. It’s more about the economy affecting financial conditions.”
Wait-and-see on September’s rate call
Williams, a permanent voter on the rate-setting Federal Open Market Committee (FOMC), declined to pre-commit to a move at the September 15–16 meeting, where traders are currently pricing roughly 66% odds of a hike, according to the CME Group’s FedWatch tool.
The Fed has held its benchmark rate in a 3.5%–3.75% range through five consecutive decisions in 2026.
“I think that we have to wait and see,” he said. “There’s no clear signs right now whether monetary policy currently is sufficient to make sure we bring inflation back to target in the next year or two, or whether you need to see further action to do that.”
The ambiguity puts real pressure on mortgage professionals. The 30-year fixed-rate mortgage has been approaching its 2026 peak as Treasury yield pressure builds, with the Mortgage Bankers Association projecting rates in the 6.1%–6.3% range through year-end.
