US Stock Index Futures Dip on Iran Clashes, Hawkish Rate Outlook
US stock index futures dipped on Monday following military clashes between the US and Iran, which drove up oil prices and stoked inflation fears. The interest-rate outlook has turned more hawkish, with a nearly 60% chance of a rate hike at the September meeting, according to the CME FedWatch tool.
Fed Chair Kevin Warsh's comments on Friday at the Jackson Hole symposium were seen as distinctly more hawkish than expected, making it clear that policy easing is not on the horizon. Warsh stated that policymakers may need to increase interest rates if inflation doesn't ease to the central bank's 2% target.
The ambiguity surrounding inflation data could raise the stakes for the upcoming US employment report, due on September 4. Recent reports have indicated that underlying trends haven't improved significantly, adding to the uncertainty surrounding monetary policy.