The Iran war is making it harder for Fed officials to cut interest rates
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Some economists think the Fed, facing inflationary pressures from rising energy prices, may not cut interest rates at all this year.
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MoneyWatch Iran war is making it harder for the Federal Reserve to cut interest rates By Aimee Picchi Aimee Picchi Associate Managing Editor, MoneyWatch Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports. Read Full Bio Aimee Picchi March 16, 2026 / 5:00 AM EDT / CBS News Add CBS News on Google Americans eager for lower borrowing costs may have a long wait ahead of them. The Iran war is complicating the picture for the Federal Reserve, which is set to meet on March 18 for its next interest rate decision. Economists had predicted the Fed would hold its benchmark rate steady on Wednesday, but many had penciled in a cut at the central bank's next meeting in June. Soaring oil and gas prices , sparked by the conflict in the Middle East, now have economists tearing up their forecasts. Higher energy prices could ripple through the economy, pushing up transportation costs, food prices and utilities, according to Wall Street analysts. The specter of higher inflation poses a conundrum for policymakers, who face the challenge of ratcheting down inflation toward the Fed's 2% annual target while also propping up a labor market that is showing signs of fatigue. On March 13, the Fed's preferred inflation gauge — the Personal Consumption Expenditures index — showed that consumer prices crept higher in January , a sign that costs continued to rise even before the Iran war's impact on the energy sector. What to expect on Wednesday There's a 99% probability that the Fed will hold its benchmark rate steady in a range of 3.5% to 3.75% on March 18, according to CME FedWatch, which bases its forecast on 30-Day Fed funds futures prices. There's now a 95% probability the Fed maintains the current range at its April 30 meeting and a 77% likelihood that it will hold steady in June, CME FedWatch says. A month ag...
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