Key facts
- Mounting inflation and a strengthening economy increase the likelihood of a Federal Reserve interest-rate hike.
- Traders anticipate a second rate tightening by the Federal Reserve in late October.
- Fed Governor Michael Barr stated further policy adjustments are likely necessary to bring inflation back to target.
Federal Reserve Governor Michael Barr indicated that further policy adjustments are likely needed to ensure inflation returns to the target in a timely manner, citing increased risks to achieving this goal. Oil prices have surged, with Brent crude futures rising about 2% to $101.09 a barrel, and diesel fuel prices exceeding $6.50 a gallon due to disruptions from the US-Iran war. Mounting inflation and a strengthening economy are increasing the likelihood of a Federal Reserve interest-rate hike. Traders are anticipating a second rate tightening by the Federal Reserve in late October.