A record of the April meeting, Jerome H. Powell’s last as chair, underscored the extent to which the war with Iran has upended the economic outlook.
Federal Reserve chair Jerome Powell said the Fed is not yet at the moment when it needs to decide whether to "look through" the Iran war energy shock. What they're saying: "It's something we will eventually, maybe, face the question of what to do here. We're not really facing it yet because we don't know what the economic effects will be," Powell told introductory economics students at Harvard University on Monday morning. - "We feel like our policy is in a good place for us to wait and see how that turns out." Powell said that the Fed has to consider the economic backdrop against which the shock is occurring. "The broader context is ... we've been coming down close to 2% [inflation], post-pandemic, but we've never actually gotten and…
The president has tried to contain economic turmoil by creating a false impression of diplomatic progress. The post As Iran War Spirals, Trump Can’t Fool Markets Forever appeared first on The American Conservative .
Foreign Affairs As Iran War Spirals, Trump Can’t Fool Markets Forever The president has tried to contain economic turmoil by creating a false impression of diplomatic progress. One of the most bizarre contradictions of Trump’s war on Iran has been the wide gap between the scale of the war’s disruption to energy infrastructure and shipping and the surprisingly muted response from financial markets. Iran has made clear that its strategy is to impose severe economic pain on the United States, Israel, and the wider global system by keeping the Strait of Hormuz shut. If that threat were being fully priced in, argues the author Matt…Open
The Federal Reserve will almost certainly hold rates steady, but fresh economic projections and other communications due out Wednesday afternoon will show how the central bank is absorbing two uncomfortable realities at once. Why it matters: The energy shock from the Iran war adds a new factor to the Fed's complicated calculus. Inflation is running hotter than expected, even before the war's impact materializes in the data. Labor market data has been grim, and it's unclear how a sustained oil shock could weigh more heavily on the economy. - Whatever the projections show will set the table for Fed chair Jerome Powell's successor, Kevin Warsh. What they're saying: "The new dot plot likely will indicate that most members retain a bias to…
Project Vault, as it's called, would store critical minerals in the way the Strategic Petroleum Reserve stores crude oil. However, the economics of mineral commodities are different in some ways from those of crude oil.