The US dollar weakened after New York Fed President John Williams reiterated that one additional rate hike may be appropriate in 2026 but indicated that further increases may not be necessary in 2027. Williams expects inflation to ease toward the Fed’s 2% target next year as the effects of tariffs and higher energy prices diminish.
His comments tempered the longer-term interest-rate outlook, contributing to a decline in Treasury yields and putting additional pressure on the dollar. Gold gained approximately 0.24% as markets reacted to Williams’s remarks, as the prospect of less restrictive monetary policy beyond 2026 provided some support.
Nevertheless, the outlook remains data-dependent. Markets are now awaiting the release of US Consumer Price Index (CPI) data later today at 20:30 (GMT+8), which could provide further clues about inflationary pressures and influence expectations for the Fed’s next policy move. The results may determine whether the dollar and Treasury yields regain upward momentum or gold extends its gains.
