Market sees next Fed hike in October, following Barr comments, hot inflation

An October interest rate hike is very much on the table after a top Federal Reserve official Wednesday expressed support for one, and as fresh economic readings showed intensifying inflation pressures.

In remarks prepared for a housing conference in Chicago, Fed Governor Michael Barr said he thinks policymakers still have more work to do even after last week's quarter-percentage-point increase.

"In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion," he said. "We want to support sustainable, durable growth in support of maximum employment, and price stability is crucial to that."

The remarks came the same day that S&P Global said its flash gauges on both the manufacturing and services industries hit their highest levels in more than four years.