Warsh's Inflation Focus Sparks Rate Hike Bets in US Dollar Rally

The British Pound has taken a hit against the US Dollar on Friday, as Federal Reserve Chair Kevin Warsh's comments have revived bets of an interest rate hike later this year.

Warsh emphasized that inflation remains a top priority for the Fed, citing summer's inflation data as better than expected but noting that core inflation hasn't improved. He reaffirmed the Fed's 2% PCE target and acknowledged that numbers are 'more concerning,' indicating the need for action.

The comments have increased the likelihood of a rate hike at the September meeting, with Prime Terminal's interest rate probability tool showing odds rising to 43% from 34%. The US Dollar Index (DXY) has climbed over 0.38%, while US Treasury yields are up nearly 1.5 basis points.