Fed Predicts Inflation Surge, Jobs Cut

0:00On March 18th, Federal Reserve officials predict the Iran war will push inflation higher this year with only a small hit to economic growth. They still plan just one interest rate cut in 2026 and kept their overall forecast unchanged from December. Gas prices have jumped to an average of $3.79 a gallon nationwide, up 88 cents from last month. Officials see this spike fueling consumer prices in the short term, but expect inflation to ease back to 2.7% by year's end. Matching their core inflation outlook. Even before the war, the economy faced headwinds with stubborn price rises and a week jobs report. Employers cut 92,000 jobs in February, nudging unemployment to 4.4%. Yet Fed leaders forecasted holding steady through the year. Policy makers remain optimistic, eyeing inflation dropping to 2.2% in 2027 and hitting their 2% target by 2028. The conflict's length will be key in testing these views. This puts the Fed in a tough spot, balancing rising prices against any slowdown and spending.

1:05With Jerome Powell's chair term ending May 15th and a nominee in place, all eyes stay on how they navigate the risks ahead. Made in AI.