European session on Thursday (October 27), the surge fell back to 109.67, down 0.04%.
In the face of the worst inflation shock in decades, it has led the world in tightening this year.
But the worry is that efforts to tame inflation could do more harm, as high levels slow business activity and hurt the economy.
The Fed is understood to have raised its policy rate five times since March, most recently to a range of 3% to 3.25% in September, after lowering the lower bound to 0% at the start of the coronavirus pandemic in 2020.
Last week, market expectations for the Fed’s benchmark interest rate peaked at 5% in the first half of 2023, the highest level yet.
“People are overestimating what the Fed is doing, just as they were underestimating it,” Mr Mnuchin said.
He predicts the 10-year Treasury yield will peak at 4.5%.
Since then, disappointing inflation news showed U.S. core consumer prices rose to a 40-year high of 6.6 percent in September, prompting some officials to suggest a higher peak may be needed to cool demand to reduce price pressures.
The US buzzes as sentiment rises, with the dollar index refreshing a monthly low of 109.60.
