Philadelphia Fed President Patrick Harker said on Tuesday that in his view,'' we are not done yet … but we are likely close," Harker said in prepared remarks at an event in Philadelphia.

"At some point this year, I expect that the policy rate will be restrictive enough that we will hold rates in place and let monetary policy do its work."

"I do think we will see a very slight uptick in unemployment, probably topping out modestly above 4 percent this year. It's an underrated advantage that the Federal Reserve is taking on inflation from a position of such labor market strength," Harker said.

US Dollar update

The US Dollar index traded around 103.00 on Tuesday but posied higher due to the hotter-than-expected US inflation dashing hopes that the Federal Reserve will soon end its tightening campaign.

The annual inflation rate in the US, as measured by the Consumer Price Index,  slowed only slightly to 6.4% in January from 6.5% in December, less than market forecasts of 6.2%, suggesting that getting inflation under control will take more time than expected.