September Rate Hike Looks Increasingly Likely Amid Rising Oil Prices

Rising oil prices and bond yields are putting pressure on the Federal Reserve to hike interest rates in September.

Oil is up again, along with bond market yields. The 10-year yield has reached its highest level since October 16, 2023.

Federal Reserve Governor Michael Barr said he would support an interest rate hike if inflation doesn't ease.

Barr expressed concern about 'broader price pressures taking hold' as inflation has remained above the Fed's 2% target for nearly five and a half years. He stated that if trends in the data give him confidence that inflation is moderating, then he thinks they can take more time to assess their policy stance.

However, if inflation appears not to be moderating sufficiently, then Barr believes they should act decisively to raise rates.