Federal Reserve officials say geopolitical tensions could push inflation higher and complicate monetary policy decisions
Federal Reserve policymakers are monitoring the conflict with Iran for its potential impact on inflation and consumer prices, as energy prices have jumped since the outbreak of hostilities.
Oil prices briefly surged over $100 a barrel amid fears of supply disruptions caused by the conflict with Iran, which threatens to stem the flow of oil from the Persian Gulf through the Strait of Hormuz.
Gasoline prices at the pump have also risen for consumers since the outset of the conflict, which could push inflation data higher and complicate potential interest rate cuts by Federal Reserve policymakers.
New York Fed President John Williams said last week that while there is uncertainty over the impact of the war on the U.S. economy and inflation, past instances in which oil prices surged didn’t lead to a fundamental shift in the outlook.