Fed's Rate Hike Hopes Dimmed by Iran Conflict

0:00Stay informed in two minutes or less with Durham News Today from the Daily News Now. A news survey from Duke University shows former Federal Reserve officials expect the Iran conflict to drive United States inflation and unemployment higher than the Fed's own forecast this year. They predict 3 percent inflation, well above the central bank's 2 percent target and a 4.6 percent jobless rate, up from the Fed's. Their estimate of 4.4 percent growth is also seen slowing more than expected. This comes right before the Fed's March 17-18 policy meeting where they release their latest dot plot projections on rates, prices, and jobs. Markets now see over 99 percent odds of steady rates at that gathering, with any quarter point cut likely pushed to late in the year, maybe, December. The Fed posts cuts in January, holding the key rate at 3.50 to 3.75 percent after earlier reductions. Former Fed insiders point to the Middle East War as a major supply shock, especially

1:01with oil prices spiking and disrupting global flows. They warn that every $10 per barrel rise in oil adds 0.2 percentage points to inflation. Most say the Fed should keep policy unchanged this year to balance its goals of steady prices in full employment. The survey of 28 ex-officials, including past governors and bank presidents, notes no recession now, but risks rising if oil stays above one. $100 per barrel long term, or hits $120, making downturn more likely. Market watches like investment chiefs at AE, wealth, etc. say oil pressures could delay rate cuts, heightened volatility, and squeeze spending. Even as they eye possible, one or two reductions later if things cool. Deal political tensions and a potential Fed leadership shift add uncertainty ahead of the doppelog. Appreciation to our sponsor for backing this episode. Some people meditate. I just lay down and press play, S-O-L-I, solelypillo.com.