It has to be said that Williams is really a good friend of the market. In the past year, it has been the third time he has released a dovish signal at a critical moment. Last night, John Williams, the President of the New York Federal Reserve, spoke at the University at Buffalo. He did not deny the possibility of another interest rate hike this year, but explicitly opposed the urgency of "adding it again quickly", directly lowering the expectation of a rate hike in October (the probability dropped from about 70% to around 50%). Key points of Williams' speech: 1) Policy stance: The September meeting has already raised interest rates by 25 basis points to 3.75% -4.00%, and there is no need for urgency. There is time to collect more data. 2) If the overall economic trend is in line with my prediction, it may be appropriate to raise the target range of the federal funds rate again before the end of the year to support inflation returning to the 2% target in a more timely manner. But this is only my prediction, and time and all data will give the answer 3) The current inflation rate of 3.7% is undoubtedly too high, and it is necessary to prevent shock solidification or secondary effects, but there has not yet been widespread spillover into sustained inflation. The job market is stable and marginally strengthened, with no inflationary pressure. This year's overall inflation is about 3.5% (affected by energy and AI related commodity prices); Next year, it will drop to slightly above 2%; Return to the 2% target by 2028. The impact of tariffs has entered the rearview mirror, energy prices will normalize, and the supply and demand of AI related goods will be better balanced. 4) Economic growth: The actual GDP growth rate for this year and next year is about 2.25%, slightly higher than the long-term trend. Unemployment rate: It will gradually decrease to about 4% in the next year. As the Chairman of the New York Federal Reserve, Vice Chairman of the FOMC, and a permanent voting committee member, Williams is equivalent to the third in command of the Federal Reserve and usually represents the central position of the committee, with high speaking power. In the past year, when there was significant divergence in the market's interest rate path, he had at least three times released relatively dovish signals in critical situations, which clearly affected pricing. Sort it out: 1) On November 21, 2025 (Chile's central bank's centenary speech), there was significant disagreement within the FOMC over whether to cut interest rates for the third time in a row in December 25 years (according to October minutes, many officials tended to pause), and the probability of a December rate cut in the market dropped to 35% -40% at one point. Williams made it clear that "I still believe there is room for further adjustment of the target range for the federal funds rate in the short term to bring the policy stance closer to the neutral range." He also pointed out that the risk of employment decline has increased and the risk of inflation rise has eased. The market reaction is strong, and the probability of a rate cut in December quickly rises to about 70%. This is his most explicit "proximal dovish guidance" in the past year; 2) On July 15, 2026 (Stability of Thy Times speech), as inflation rose again due to the Middle East conflict and AI investment, the market began to price a possible interest rate hike in the second half of the year, and some officials' attitudes turned hawkish. Williams stated that the current policy is "well positioned", implying that there is no need to raise interest rates at the July meeting, and stating that there is reason to believe that inflation has peaked (expected to drop to around 3.25% by the end of the year). He emphasized that pressures such as tariffs, rent, and wages may not continue, and oil prices may have peaked. This is interpreted by the market as a cooling of expectations for recent interest rate hikes. The third time was last night Of course, this is also because Williams is rarely extremely hawkish, and key divergence points tend to use "data dependence+lack of urgency+time window shift" to balance the internal and market prices of the committee. Last night, this time was quite similar to the one in November 2025- both were when the market had already set a significant price for the 'next move' and stepped on the brakes. His statements at the two critical moments before and the FOMC meeting after his statements were basically consistent with his views. This is already a loyal comrade who has been tested by the market! This article is sponsored by @ bitget_zh, "Bitget Buying US Stocks: Instant Entry, Smooth Trading