Federal Reserve could signal no interest rate cuts this year in wake of Iran war - AP News
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The Bottom Line
Federal Reserve may hold interest rates steady through 2025 due to Iran war uncertainty and inflation concerns.
How This Affects You
Higher rates could increase your mortgage, auto loan, and credit card costs as the Fed pauses rate cuts.
AI Summary
The Federal Reserve may signal it will hold interest rates steady throughout 2025 amid escalating tensions with Iran, according to reporting from AP News. The geopolitical crisis has injected new uncertainty into inflation and economic growth forecasts, complicating the Fed's calculus on rate policy after a year of cuts in 2024. A pause on cuts would represent a significant shift from market expectations and could have ripple effects across lending, borrowing costs, and consumer spending. The Fed typically adjusts policy based on inflation trends and employment data, but geopolitical shocks can force officials to reassess economic risks. The central bank's next policy signal will likely come at an upcoming meeting, where officials will lay out their economic projections and rate outlook.
What's Being Done
The Federal Reserve will signal its policy outlook at an upcoming meeting with new economic projections and rate guidance.
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Brent crude nears $115 after Iran attacks key energy facilities in the Gulf - AP News
Iran War Live Updates: Oil and Gas Prices Soar After New Attacks on Gulf Energy Sites - The New York Times
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FinanceNew economic projections signal a tricky Federal Reserve path
<p>The Federal Reserve will almost certainly hold rates steady, but fresh economic projections and other communications due out Wednesday afternoon will show how the central bank is absorbing two uncomfortable realities at once.</p><p><strong>Why it matters: </strong>The energy shock from the Iran war adds a new factor to the Fed's complicated calculus. Inflation is running hotter than expected, even before the war's impact materializes in the data. Labor market data has been grim, and it's unclear how a sustained oil shock could weigh more heavily on the economy.</p><hr><ul><li>Whatever the projections show will set the table for Fed chair Jerome Powell's successor, Kevin Warsh.</li></ul><p><strong>What they're saying: </strong>"The new dot plot likely will indicate that most members retain a bias to ease policy this year and in 2027," Sam Tombs, chief U.S. economist at Pantheon Macro, wrote in a client note.</p><ul><li>But Tombs cautioned that "the biggest risk to markets" is if n...
FinanceThe Federal Reserve is facing tough choices as the economy faces deep uncertainty
The Federal Reserve's job is expected to hold its benchmark interest rate steady as it faces inflationary pressure from the war with Iran — and a weakening labor market.
FinanceThe Iran war is making it harder for Fed officials to cut interest rates
Some economists think the Fed, facing inflationary pressures from rising energy prices, may not cut interest rates at all this year.
Live updates: Interest rates steady, Federal Reserve forecasts one rate cut in 2026 - Yahoo Finance
National SecurityUS faces elevated terrorism threats against backdrop of Iran war and cuts at FBI, Justice Department - AP News
<a href="https://news.google.com/rss/articles/CBMijwFBVV95cUxQdXJlNE81dHhsY3RIZDBRNTNlUGZITnJ0eVJ5LUY3cjZHb3ZlVHJiR2VzcWFpOV9PdjdzUXcwWWgxLTlBelpXX3RFbm9JYUxZb2kwbVNDTmh1LWRfZ1hJZWdYbGtBOWVKZi1Bb2Zsak9mMHJZeFdBOURURjdqMHYwdlo2bnZXSDJ3M3VFVGxvcw?oc=5" target="_blank">US faces elevated terrorism threats against backdrop of Iran war and cuts at FBI, Justice Department</a> <font color="#6f6f6f">AP News</font>
FinanceCracks emerged in a resilient US economy before war in Iran sent oil prices rocketing - AP News
<a href="https://news.google.com/rss/articles/CBMitgFBVV95cUxNVGZxOGhaUlRKVUVIWkd3QUVubEZPTHFvc3hZeFBBZG1nVXlId1N1d2FlTmNLeVY5bHp0bW1SZ18zZndOa0ExSGZqT3hEQ1NqS0Y1RkgyTWV3ZUpNX2NxeEJmQUxBSDM0YWxTMll6WW1aVm91bGd1SENxa0Z6eWZtTDZyNk1qZjRFS0tJYmRLbVU5UE1KU0UwVzFvSTdYdjlzY3d2c01VNkdYSzlfYl9zMDVsOEtpUQ?oc=5" target="_blank">Cracks emerged in a resilient US economy before war in Iran sent oil prices rocketing</a> <font color="#6f6f6f">AP News</font>
US Postal Service could run out of money as soon as October - Reuters
<a href="https://news.google.com/rss/articles/CBMimwFBVV95cUxOX0xZZVhKVmJyeExTLUlJZzNuRmRoYUVoTGNPOS1vbXNydTlhcjNMWFF0amNsdEc0WWtYc1M0VVoxbVdDOHpXR3B6S0tSc3J4QzJVWWdkUkRuWW5keV9jampOODVlQ3l3cXdQWDd1NGtmb0dya3RybTRqdnRBT0p4VTlOMHVUbElDSkVvOFB3TUNBaHI2d0dGbFhGOA?oc=5" target="_blank">US Postal Service could run out of money as soon as October</a> <font color="#6f6f6f">Reuters</font>
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