Schnabel's Hike Call Puts Fed Under Pressure Ahead of Warsh's Jackson Hole Speech

The Federal Reserve is set to make its next move in fighting inflation as Fed Chair Kevin Warsh prepares to speak at the annual gathering of central bankers in Jackson Hole, Wyoming. Isabel Schnabel, an Executive Board member of the European Central Bank, has signaled that further rate hikes are needed to keep inflation below 2% for an extended period.

Schnabel's comments have added pressure on the Fed to act, particularly with Treasury yields edging higher today after a key US gauge showed inflation remains well above the Federal Reserve's target. This keeps alive expectations that the central bank will start raising interest rates by the end of the year.

The Strait of Hormuz agreement between Iran and Oman has also had an impact on oil prices, with Brent slipping below $86 a barrel for its third day in a row. However, it's unclear how quickly the Strait would be reopened even if a deal is reached.