Trump Expects Iran Talks to Continue, Considers Military Options Amid Tension

Several US Fed officials made their latest remarks on inflation and the outlook for rate hikes. New York Fed President Williams noted that the era of the US Fed relying on clear forward guidance has "ended," and another rate hike this year is a "reasonable" expectation. Philadelphia Fed President Paulson said that if the economy evolves in line with expectations, the US Fed may need to raise rates further to bring inflation back to target. Cleveland Fed President Hammack stressed that the US economy is facing a series of supply shocks, heightening the risk that an inflation mindset becomes entrenched.

After the US Fed implemented its first rate hike in three years recently, several officials called for further policy tightening. On Friday alone, three Fed officials released hawkish signals, warning of inflation risks. Among them, Cleveland Fed President Beth Hammack said she worries that persistently high inflation will lead the US public to gradually view high prices as the norm, and the US Fed will never allow that to happen.

US Treasury Secretary Bessent said core inflation has remained stable, and US Fed policymakers should keep an open mind on interest rates. He also believes that productivity gains from artificial intelligence and deregulation measures will help further curb US inflation.