This Tuesday and Wednesday the Federal Reserve will discuss the next steps of its monetary policy. How does the war escalation impact between Israel and Iran?
This Tuesday, begins The meeting on interest rates of the US Federal Reserve (FED)whose decision we will know this Wednesday. Yes ok The market expects the agency to keep them unchanged On this occasion, the attention will be concentrated in the future signals issued by the entity.
So far, the organism conducted by Jerome Powell He was cautious, particularly for the fear of possible inflationary impacts of the commercial war initiated by the government of Donald Trump. The Republican president, meanwhile, Press the Fed to hurry rates of interest in order to favor the growth of economic activity in the US.
However, market prices suggest that Investors do not project a rate cut at least until September.
The Fed, the Israel-Iran War and War
Anyway, right now, The main background of the Fed meeting is the war in the Middle East unleashed with the attack of Israel to Iran and that climbed from Tehran’s response. The war conflict keeps markets in suspense: On Tuesday the main bags of the world fall and drives the price of oil to the area of U $ S75 per barrel.
“The FOMC (Monetary Policy Committee) meets again this week with a general uncertainty not less than last month. It is true that commercial confrontation has given way to negotiations, although its result remains uncertain, but at the same time the exacerbation of tensions in the Middle East puts in doubt what had been one of the few favorable factors for the world economy in recent times: the fall in oil prices Gilles Moëcchief economist of Ax.
“As is usually the case with the near east crises in which Iran is involved, the key issue is whether the Ormuz Strait will remain open to oil flow,” says Moëc.
“Although it is very likely that the Fed reaffirms this week its attitude of ‘waiting and seeing’, the FOMC points graph for 2026 and 2027 could reflect some divergence among the members, with the appearance of hawk groups and pigeonsdivided on the risks of persistence of inflation in the US, “says Moëc.
“We would not surprise us that only one cut in the new points chart was announced. However, we believe that the points graph will be more interesting for the following years,” says the expert.
Source: Ambito
