Fed Official Supports Rate Hikes Due to Inflation and Middle East Tensions

A top Federal Reserve official has revealed that stubbornly high inflation and the renewal of combat in the Middle East in August were key reasons she supported raising borrowing costs last week.

Susan Collins, president of the Federal Reserve Bank of Boston, agreed with the Fed's decision to lift its benchmark interest rate by a quarter-point to about 3.9% last Wednesday.

Collins also expects that the Fed will keep rates unchanged next year and penciled in a second rate hike for later this year.