A Federal Reserve governor warns inflation may require future rate hikes if supply shocks from the Iran War persist.
Federal Reserve Governor Christopher Waller indicated the U.S. central bank may need to raise interest rates if inflation risks from the Iran War do not ease. While the Fed’s current stance remains steady, Waller suggested longer-term tightening could be necessary if inflation fails to abate soon.
The two-year Treasury yield traded near 4.08%, while the 10-year yield eased to 4.55%. The 30-year bond yield reached 5.08%, its highest level since the late 1980s, reflecting heightened inflation concerns. Markets and economists have not priced in rate cuts amid persistent uncertainty.
Waller’s remarks underscore the Fed’s cautious approach as it monitors the impact of geopolitical tensions on oil prices and broader inflation trends.