New York Federal Reserve Bank President John Williams said that it is likely that there will be a need for further increases in interest rates, as part of the US central bank’s efforts to reduce high inflation, despite the continued strength of the US economy.
Williams did not specify the date of the next increase in interest rates or the size of the increases that the central bank might approve.
“The economy is strong, and the job market continues to improve, but inflation continues,” Williams said, during a UC Berkeley Alumni Association event held in New York.
He added: “We will need to take action over time to ensure that inflation returns to our 2 percent target in a timely and sustainable manner,” noting that the central bank “still has work to do to bring monetary policy to the appropriate level.”
Financial markets widely expect that the Federal Reserve will raise the key interest rate range, currently set between 3.75 and 4 percent, by a quarter of a percentage point during the next meeting of the Federal Open Market Committee in early December, and to raise it again in January.
In the wake of higher-than-expected inflation data this week, discussion is escalating about the possibility of the Federal Reserve resorting to monetary tightening at a greater pace.
Core inflation recorded an increase of 0.3 percent during October, a pace that Federal Reserve Board member Christopher Waller had previously said might make raising interest rates by 50 basis points an option in December.
But other central bank officials, including Cleveland Fed President Beth Hammack, called for a more moderate and gradual approach to raising rates, to allow the economy room to adjust to higher short-term borrowing costs.
The Federal Reserve cannot lower the general level of prices
In response to a question about the rise in the cost of living as a result of the wave of inflation witnessed in the past five years, Williams said that the ability of the central bank to address this problem is limited.
He explained that the central bank uses interest rates to influence the rate of price change, not their absolute level, which means that the wave of inflation in recent years has left many individuals and companies facing much higher price levels.
He added that history shows that trying to restore prices to their previous levels is like “putting the genie back in the bottle,” which would lead to major imbalances and damage to the economy.
Williams pointed out that central banks decided over the past decades to focus on keeping inflation low, rather than trying to reverse the effects of wars or epidemics, and instead work to move forward.
He said that this approach has consequences, namely the continued rise in the cost of living.
Indonesia's general budget recorded a deficit of 379.3 trillion rupiah ($20.81 billion) during the period from January to October 2026, equivalent to 1.47 percent of GDP, according to what Indonesian Finance Minister Suhasil Nazara announced on Friday.
Nazara explained that public revenues amounted to 2.618 trillion rupees during the first ten months of the year, an increase of 24 percent year-on-year, while total spending rose to 2.997 trillion rupees, an increase of nearly 16 percent compared to the same period last year.
The government expects the budget deficit to reach 2.85 percent of GDP during the entire year 2026, unchanged from its expectations issued last July, according to the minister.
In details of spending, the government spent 415.8 trillion rupees on fuel subsidies, electricity, fertilizers and microloans during the aforementioned period, an increase of 32 percent year on year. Expenditures allocated to President Prabowo Subianto's flagship program to provide free school meals amounted to 173.2 trillion rupiah.
For his part, Director General of Budget at the Ministry of Finance, Sudarto, said that the government is still allocating 500 trillion rupiah to support energy over the course of 2026, but is open to increasing this amount to keep fuel prices unchanged.
Regarding deficit financing, Nazara pointed to a recovery in applications submitted during the most recent regular government bond auction, as well as recording good demand for bonds denominated in foreign currencies, which reflects investor confidence.
The government relies mainly on issuing rupee-denominated bonds to finance the budget deficit, in addition to issuances in foreign currencies, including the US dollar, the euro, the Japanese yen, and the Chinese yuan, during the current year.
Copper prices rose slightly today, Friday, after a sharp selling wave in the previous session, but they remained on track to record a weekly loss, as concerns related to Nvidia and investments in artificial intelligence outweighed the support resulting from the scarcity of supplies in China, the largest consumer of the metal in the world.
Standard three-month copper contracts on the London Metal Exchange rose 0.68 percent to $13,680 per ton by 01:45 GMT, after falling to a four-month low of $13,515 per ton on Thursday, affected by concerns about artificial intelligence and the strength of the US dollar.
On the Shanghai Futures Exchange, the most actively traded copper contract rose 0.13 percent to 105,280 yuan ($15,783.16) per ton.
Copper prices have fallen by 0.65 percent since the beginning of the week, as investors tend to be cautious about technology stocks and companies related to artificial intelligence, raising concerns about future spending on data centers, which are expected to constitute a growing source of demand for the metal.
These concerns came after the resignation of Nvidia CEO, Jensen Huang, on Thursday, which raised questions about the continued strength of demand related to artificial intelligence infrastructure.
Wider uncertainty about US policies after the midterm elections, and opposition to some new data center projects, also contributed to increased investor caution.
On the other hand, copper found some support from tight supplies in China, as the price premium for copper in the port of Yangshan, which is an indicator of Chinese demand for the imported metal, rose to a record level of $240 per ton as of Thursday.
But the local premium paid over copper futures prices on the Shanghai Stock Exchange fell to 775 yuan per ton as of Thursday, compared to a record level of 2,615 yuan on November 6.
As for other metals traded on the London Stock Exchange, aluminum fell by 0.18 percent, while zinc rose by 0.70 percent, lead by 0.21 percent, nickel by 0.10 percent, and tin by 0.96 percent.
On the Shanghai Stock Exchange, aluminum fell by 0.22 percent, zinc by 0.16 percent, while lead rose by 0.77 percent, nickel fell by 0.07 percent, and tin rose by 1.42 percent.
Goldman Sachs warns of risks threatening its expectations for copper prices
In a related context, Goldman Sachs said on Thursday that it sees risks tending to lower its expectations for the price of copper in 2027, amounting to $15,400 per ton, in the wake of the US midterm elections, attributing this to investor concentrations related to artificial intelligence and declining expectations regarding US customs duties.
The bank explained in a note that “the main risks facing our forecasts stem from investor concentrations and not from actual demand,” referring to the markets’ exposure to investments related to artificial intelligence.
He pointed out that investors have become more cautious about the artificial intelligence boom, amid fears that Democratic control of Congress will slow investments in this sector and the expansion of the establishment of data centers.
The bank added that copper may reach an average of about $14,600 per ton in 2027 if investor concentrations remain at their current levels.
He also indicated that declining expectations regarding tariffs threaten his assumptions regarding the accumulation of inventories in the United States, but he pointed out that Democratic control of Congress does not mean that the risks of tariffs have disappeared.
Goldman Sachs estimated that the average price of copper will reach about $14,500 per ton in 2027, with the possibility of recording lower levels if the majority of the stocks collected in the United States during the current year return to global markets.
