Warsh Hints at Rate Hikes as US-Iran Tensions Ignite Oil Price Spike
Federal Reserve boss Kevin Warsh's hawkish comments sent shockwaves through markets on Monday, sparking bets that US interest rates will rise soon.
Asian stocks plummeted as investors ramped up expectations of a rate hike, with tech firms leading the decline. The Fed's battle against inflation has been complicated by tensions between the US and Iran, which have pushed oil prices higher.
The US-Iran conflict escalated on Monday after the US attacked Iranian rocket launchers on a small island in the Strait of Hormuz, prompting Tehran to retaliate with strikes on US military targets in Jordan. Oil prices spiked more than 2% as a result, with crude contracts rising sharply.
The attack has revived concerns about the conflict's impact on global energy supplies, particularly given that the strait through which most crude and gas passes is largely closed. US officials have vowed to 'economic asphyxiate' Iran in an effort to secure its cooperation.