Oil prices drop alongside other commodities as Fed Chair Powell opens the door to even higher US interest rates

• Commodity prices slumped Tuesday as Fed Chair Powell indicated further rate hikes are coming. 
• The US Dollar index hit a two-month high, pressuring dollar-denominated commodity prices. 
• Oil lost more than 3%, silver slid nearly 5% and gold gave up ground.

Commodity prices tumbled Tuesday while a key US dollar gauge jumped to a two-month high as Federal Reserve Chairman Jerome Powell warned that a "bumpy" trajectory for inflation would likely mean interest rates will need to go higher than previously anticipated. 

"The Fed boss now thinks that they will have to go further and faster on rate rises, potentially moving away from the sedate 25 basis points pace of the last meeting," Chris Beauchamp, chief market analyst at IG, an online trading platform, wrote Tuesday.