Overview
- U.S. Treasury Secretary Scott Bessent said the Federal Reserve should hold off on lowering rates because the Iran conflict has driven up oil prices and clouded the outlook.
- The remarks mark a sharp shift from his earlier push for rapid easing, and he said policymakers are doing the right thing by watching how the economy absorbs the shock.
- Federal Reserve minutes warned that higher oil could slow progress back to 2% inflation, and government data showed March consumer prices rose 0.9% from February and 3.3% over the year.
- Chicago Fed President Austan Goolsbee said a longer conflict would reduce the chances of rate cuts this year, pointing to the risk that the energy spike takes hold.
- Investors have moved to price fewer and later cuts, and focus now turns to the April 28–29 Fed meeting and a pending leadership transition as Jerome Powell’s term ends in May.