San Francisco Federal Reserve President Mary Daly on Monday repeated that she believes two more rate hikes this year will likely be needed to bring down inflation that is still too high, while Cleveland Fed President Loretta Mester also signaled more rate rises.
Higher interest rates could slow economic growth and reduce oil demand.
The U.S. Labor Department reported last Friday the smallest monthly job gain in two-and-a-half years along with strong wage growth. The data strengthened the likelihood that the Fed would raise interest rates at its meeting later this month.
Meanwhile, China’s factory gate prices fell at the fastest pace in more than seven years in June, according to government data, indicating a slowdown in the recovery in the world’s second-largest economy.
However, oil demand from China and developing countries, combined with OPEC+ supply cuts, is likely to keep the market tight in the second half of the year despite a sluggish global economy, the head of the International Energy Agency (IEA) said.
Markets are also focusing on the release of U.S. Consumer Price Index data and a slew of economic reports from China later this week to ascertain demand.
