"If inflation remains high and demand gives no signal it is likely to drop, that would require tighter monetary policy," Federal Reserve Bank of Richmond President Thomas Barkin said on Tuesday, as reported by Reuters.

"Consumer spending, economic strength make it possible the US economy could reaccelerate before inflation cools," Barkin added but noted that he will not prejudge the outcome of the Fed's September 19-20 policy meeting.

Market reaction

The US Dollar Index clings to daily gains above 103.50 following these comments.