Fed Weighs Second Rate Hike Amid Rising Inflation and Strong Growth

The Federal Reserve may increase interest rates for the second time this year as inflation and strong economic growth continue to rise.

Rising energy costs are contributing to higher prices, with Brent crude futures reaching $101.09 per barrel on Wednesday and diesel prices exceeding $6.50 per gallon in the United States.

According to Reuters, futures contracts on short-term U.S. interest rates now price in a 70% probability of another increase at the October 27-28 meeting, up from around 55% earlier that day.

Federal Reserve official Michael Barr stated that given the combination of inflation risks and strong economic growth, the regulator would likely have to continue raising rates to return inflation to its target in a timely manner.