Yahoo Finance
The Iran War, tariffs and the demand-driven AI-investment boon could add up to create inflationary conditions whereFederal Reservepolicymakers would need to consider interest-rate hikes later this year.
According to the minutesof the June Federal Open Market Committee meeting, policymakers at the central bank were concerned about highinflationbut needed more data before making a move on the benchmark Federal Funds Rate.
The data could also signal that rates should continue to hold for a while or even go lower sooner than many expected.
The minutes do not name participants so Fed watchers need to closely read the words in the 15-page document released July 8 as well as read between its lines.
LPL Financial Chief Economist Jeffrey Roach said the minutes suggest the FOMC had a "good family fight" over the various scenarios under review -- a difficult situation with a wide range of outcomes.
"One thing is certain: future policy is heavily contingent on the political situation in the Middle East.
If we can tease out any forward guidance from the minutes, it would be the committee is working through a wide range of scenarios and will not commit to a specific scenario until the incoming data provides necessary clarity,'' he said.
Roach added that he didn't expect the FOMC to make a change in either direction at the July 28-29 meeting.
The Fed'sdual mandatefrom Congress requires maximum employment and stable prices.
Lower interest ratessupport hiring but can fuel inflation.
This risks fueling further inflation, potentially leading to an inflationary spiral.
Higher rates cool pricesbut can weaken the job market.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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