Fed Officials Hint At Possible September Rate Hike – The Mortgage Note

Central Bank officials are prepared to hike interest rates for the first time since 2023 if incoming inflation data doesn’t reflect a cooldown.

Wall Street is betting on a hike following comments from Federal Reserve Chairman Kevin Warsh at last week’s annual symposium in Jackson Hole, Wyoming.

Warsh said he isn’t convinced that “underlying trends have meaningfully improved.”

“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do,” he said.

Fed Governor Michael Barr echoed the sentiment Tuesday, suggesting the upcoming jobs report and consumer and producer price indices will factor into the Central Bank’s decision making at the FOMC’s September 15-16 meeting.

“If trends in the data give me some confidence that inflation is moderating on a path to 2%, then I think we can take a bit more time to assess our policy stance. However, if inflation appears not to be moderating sufficiently, then I think we should act decisively to raise rates,” Barr stated in prepared remarks.

Treasury yields soared this week on fears that renewed fighting in Iran will ripple through the global economy.

The 10-year Treasury yield, which mortgage rates follow, hit its highest level since January 2025 on Tuesday.

Investors are worried that fighting in the Middle East could disrupt global oil supplies and push inflation higher. U.S. forces began targeting Iran’s Revolutionary Guard after further attacks on shipping near the Strait of Hormuz.

The price of oil rose 5.2% to $90.22 per barrel on the news.