The Federal Reserve must grapple today with how to weigh surging oil prices against shrinking payrolls in its first meeting since the Iran war began.
Policymakers were already split over whether to prioritize persistent inflation or lackluster employment. Now, “the war increases both the risk that earlier rate cuts will eventually be needed to address labor market softening and the risk that a higher inflation path will delay cuts,” Goldman Sachs analysts wrote.
The central bank is expected to leave rates untouched Wednesday. That will likely draw ire from President Donald Trump, who told reporters Monday the Fed should hold a “special meeting” to cut rates “right now.”
He also attacked a judge for thwarting his administration’s attempt to subpoena the central bank, writing on Truth Social: “How is this absolutely terrible Federal Reserve Chairman, Jerome ‘Too Late’ Powell, not even allowed to be investigated?”