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Why the Fed Is Watching the Iran War Energy Spike
Season 1
Episode 22
Published 1 month, 1 week ago
Description
The Iran conflict has pushed average US household energy costs up by $450 a year, and the Fed is taking notice. In this episode of The Federal Reserve Podcast, Lucas and Luna examine how the war-driven energy inflation complicates the Fed's rate path. With core PCE at 3.3% and the fed funds rate stuck at 3.64, energy has become the wildcard. We discuss why Chicago Fed President Goolsbee flagged persistent energy inflation, why Minneapolis Fed's Kashkari is prioritizing the inflation fight over labor market concerns, and how the 10-year breakeven inflation rate—which dipped to 2.38%—suggests markets don't expect a rate cut soon. Plus, a look at why the yield curve remains inverted and what that means for the economy through the summer.