Boston Fed president backed rate hike because inflation wasn't improving fast enough
Susan Collins cited slow inflation progress and Middle East conflict as reasons she supported the Fed's quarter-point increase last Wednesday
U.S. Treasury yields experienced a slight increase on Tuesday as investors assessed the impact of lower oil prices against the Federal Reserve's anticipated interest rate hikes. The two-year yield reached a new two-year high of 4.7879 percent, indicating the market's expectation of further rate hikes by the Fed. In the previous week, the Federal Reserve raised interest rates for the first time since 2023 in an effort to curb inflation.
Traders speculate a 53 percent chance of another rate hike at the Fed's next meeting in October, as per CME FedWatch.
Boston Fed President Susan Collins shared her support for the Fed's decision to raise rates, addressing concerns about future inflation exceeding the 2 percent target. Despite a dip in oil prices, they remained above the day's lows. Oil prices have surged since the initiation of the U.S.-Israeli war on Iran, raising inflation concerns and heightening expectations of higher interest rates.
Additionally, investors considered remarks made by former President Donald Trump, who expressed optimism about a potential deal with Iran during a United Nations address.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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