The Federal Reserve may not be finished raising interest rates this year, with one of its senior policymakers signaling Thursday that another increase could be necessary to keep inflation from becoming entrenched.

New York Federal Reserve President John Williams said at an economic conference in London that market expectations for another rate hike by the end of the year were a “reasonable” way to view the outlook, while stressing that policymakers have not made a final decision.

“We have to see,” Williams said, adding that officials will continue collecting economic data before determining their next move.

The comments come one week after the Fed raised its benchmark policy rate to a range of 3.75% to 4%. Sixteen of the 18 Fed policymakers indicated that they expect at least one additional increase before the end of 2026.

Williams, who serves as vice chairman of the Federal Open Market Committee, said the U.S. and other economies have remained resilient despite the surge in energy prices associated with the war involving Iran. Inflation, however, remains the central concern for policymakers trying to balance price stability against economic growth.

Williams said returning inflation to the Fed’s 2% target is essential, while also emphasizing the importance of doing so within a reasonable timeframe. Fed officials currently expect inflation to remain above target until 2029.

Inflationary pressures have been complicated by President Donald Trump’s tariff policies and higher energy costs stemming from the conflict in the Middle East. Those factors have made the economic outlook more uncertain and complicated the Fed’s efforts to determine how restrictive monetary policy needs to remain.

Financial markets are currently pricing in substantial odds of another rate increase at the Fed’s October meeting, with another potential hike expected in December.

Williams cautioned against treating those expectations as a guarantee. He said the Fed’s September decision reflected a buildup of inflationary pressures over time rather than a single dramatic shift in the economic data.

The central bank is therefore expected to continue evaluating inflation, employment, energy prices and other economic indicators before deciding whether additional rate increases are warranted.