Oil price surge stokes investor fears of further US interest rate hikes

Equity markets demonstrated uncertainty as investors awaited a critical United States inflation report. Their apprehension stemmed from the fear that the recent oil price surge might push consumer prices upward, pressuring the Federal Reserve to increase interest rates once more.

The Federal Reserve asserted that its monetary policy decisions will be driven by data, considering a variety of figures. Throughout 2023, these figures have primarily indicated that over a year of tightening is yielding the intended effect.

This perception had nurtured the hope that the rate hike in July would be the final one and that officials would permit its measures to permeate the economy, thereby taming inflation. However, recent robust data, particularly concerning the job market and services sector, have reignited speculation of further hikes. This sentiment has…