Fed Stuck Between Inflation, Energy Prices

0:00It's March 18th, here's your Anchorage News in two minutes. The Federal Reserve faces tough choices as the conflict with Iran drives of oil and gas prices, throwing off their plans for inflation and jobs data. This spike is likely to push back any interest rate cuts this year, leaving high borrowing costs in place for home loans and car buys. Officials wrapped up a key meeting this week, and they're expected to hold rate steady for now. Meanwhile, the 12-member committee led by Chair Jerome Powell sees no clear path forward yet. Higher energy costs could boost inflation short-term, calling for steady or even higher rates, but a deep slowdown might demand cuts to support, employment. Many economists predict the first cut won't come in so September or later after meetings in late April and June pass without change. Experts like those at City and SGH macro say the Fed should wait and see how things play out before acting. Some officials remain hopeful about eventual cuts, viewing the oil shock as temporary, but sticky inflation readings from January make them cautious.

1:03Mortgage rates ticked up to 6.1 percent last week, squeezing buyers further. The Fed also updated their quarterly forecast, which were already showing inflation above targets at 2.6 percent by year end, with core. Measures at 3.1 percent recently. Sticking to a single cut projection from December looks shaky now, as leaders debate raising inflation outlooks to 2.8 percent or more. In the end, memories of calling pandemic inflation transitory still haunt them, making rate relief less likely while prices stay elevated. Consumers will feel the pinch longer, but the bank aims to avoid past errors by staying patient amid the supply shock. The Daily News Now is presented by our sponsor, LinkedIn the description, your pillow, your podcast, your moment, made for listening in bed, S-O-L-I, solely pillow.com, made in bed, S-O-L-I.