Fed Rate Cut Expectations Diminish
Hopes for a Fed rate cut are fading as the US-Iran conflict pushes oil prices higher reported. Mortgage rates remain near 6% reported.
The US-Iran conflict's impact on oil is making the Fed's job harder. Some analysts predict only one rate cut in 2026 due to rising energy prices. Oil prices briefly hit over $100 a barrel amid fears of supply disruptions. The conflict threatens oil flow from the Persian Gulf through the Strait of Hormuz. Rising gasoline prices are already hitting consumers, potentially pushing inflation higher. This could further complicate the Fed's plans to cut interest rates. Minneapolis Fed President Neel Kashkari has expressed concerns that the Middle East conflict is making him rethink his forecast of one rate cut this year. The situation introduces considerable uncertainty into the economic outlook.
