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If the Strait of Hormuz remains threatened, it could ultimately lead to higher prices for everyone here in the United States. That’s why this weekend President Trump asked other countries to protect this trading artery. Talking to other countries about working with us for the policing. right. I If we do that’s great and if we don’t. President Trump told reporters last night he’s spoken with about 7 countries regarding patrolling the straits, but he would not actually say which countries are open to helping. And even though the US gets *** small fraction of its oil from the Persian Gulf, there is *** domino effect that happens when the global oil market is impacted, and we’re seeing this play out right now at the pumps. AAA reports regular gas is up to 372. That’s about *** 24% increase compared to when the war started. On Sunday, Energy Secretary Chris Wright said when the war in Iran ends, that is when we will see gas prices drop. But it’s not just gas prices that will continue to increase as the war drags on. Economists predict that this could pressure airlines to raise their ticket prices. Retail prices could also increase, and this could also cause ride sharing services like Uber and Lyft to add *** temporary fueling fee to help their drivers. In Washington, I’m Rachel Hirsheimer.
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Federal Reserve officials expect the Iran War will worsen inflation this year while having little impact on growth, but they still expect to cut their key rate once in 2026.For now, Fed policymakers left short-term interest rates unchanged Wednesday for the second straight meeting at about 3.6%. In a statement, the central bank said that the “implications of developments in the Middle East for the U.S. economy are uncertain.”Still, by keeping their forecast for a rate cut this year and next — the same projections that they made in December — central bank policymakers appear to expect the gas price spike from the Iran war to have a largely temporary effect on inflation and the economy. Policymakers also foresee unemployment remaining unchanged by the end of this year, a more optimistic outlook than most outside economists.Whether that turns out to be true will largely depend on the length of the conflict. The officials expect inflation to fall back to 2.2% in 2027 and hit the Fed’s 2% target in 2028.Fed officials now expect that inflation will be 2.7% at the end of this year, up from their December forecast but slightly below the 2.8% it reached in January. They expect core inflation, which excludes the volatile food and energy categories, to also finish the year at 2.7%, up from a previous forecast of 2.5%. The Fed considers core prices a better measure of longer-run inflation. Consumer prices will spike higher in the coming months as gas prices have soared, but those increases could unwind by the end of the year, particularly if the conflict ends soon.
Federal Reserve officials expect the Iran War will worsen inflation this year while having little impact on growth, but they still expect to cut their key rate once in 2026.
For now, Fed policymakers left short-term interest rates unchanged Wednesday for the second straight meeting at about 3.6%. In a statement, the central bank said that the “implications of developments in the Middle East for the U.S. economy are uncertain.”
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Still, by keeping their forecast for a rate cut this year and next — the same projections that they made in December — central bank policymakers appear to expect the gas price spike from the Iran war to have a largely temporary effect on inflation and the economy. Policymakers also foresee unemployment remaining unchanged by the end of this year, a more optimistic outlook than most outside economists.
Whether that turns out to be true will largely depend on the length of the conflict. The officials expect inflation to fall back to 2.2% in 2027 and hit the Fed’s 2% target in 2028.
Fed officials now expect that inflation will be 2.7% at the end of this year, up from their December forecast but slightly below the 2.8% it reached in January. They expect core inflation, which excludes the volatile food and energy categories, to also finish the year at 2.7%, up from a previous forecast of 2.5%. The Fed considers core prices a better measure of longer-run inflation. Consumer prices will spike higher in the coming months as gas prices have soared, but those increases could unwind by the end of the year, particularly if the conflict ends soon.
