Minneapolis Federal Reserve President Neel Kashkari warned that a prolonged Iran conflict could intensify inflationary pressures and inflict broader economic damage, limiting the central bank’s ability to provide clear forward guidance on interest rates.
Echoing similar concerns, Chicago Fed President Austan Goolsbee told Reuters that over the weekend that the latest inflation figures were disappointing and underscored the need for caution before considering any policy easing.
Recent data showed that US inflation accelerated in March, driven in part by higher gasoline prices linked to the Iran conflict. The Personal Consumption Expenditures Price Index rose 0.7 per cent during the month, marking its biggest monthly increase since June 2022.