Federal Reserve officials are still anticipating interest rate cuts this year, despite uncertainty caused by the Iran war and tariffs. Most participants believe that rising gas prices could lead to easier monetary policy if they hit the labor market and consumer wallets. Policymakers will need to be “nimble” as they assess the impact of the war on inflation and hiring.
The Federal Open Market Committee voted 11-1 to keep the benchmark interest rate steady, with officials concerned about sustained inflation that could require rate hikes. However, most participants think it’s too early to know how the Middle East conflict will affect the US economy and are monitoring the situation closely. They expect inflation to continue moving toward the Fed’s 2% target.
The labor market has been creating jobs at a steady pace, but growth has come primarily from health care-related sectors, raising concerns about stability and potential for growth. Officials believe that risks to employment are skewed to the downside and that labor market conditions appear vulnerable to adverse shocks.
Source: https://www.cnbc.com/2026/04/08/fed-officials-still-foresee-rate-cut-this-year-despite-war-impacts-minutes-show.html