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Federal Reserve officials anticipate lower interest rates this year, despite the Iranian conflict clouding the economic outlook, according to minutes from the March policy meeting.
Policymakers left interest rates unchanged at the March 17—18 meeting, keeping the target federal funds rate range between 3.5 percent and 3.75 percent.
The meeting summary, released on April 8, suggested that most participants believed the war—now in its sixth week—could require rate cuts if higher gasoline prices adversely affect consumer spending or the labor market.
“Most participants raised the concern that a protracted conflict in the Middle East could lead to a further softening in labor market conditions, which could warrant additional rate cuts, as substantially higher oil prices could reduce households’ purchasing power, tighten financial conditions, and reduce growth abroad,” the document said….
Policymakers left interest rates unchanged at the March 17—18 meeting, keeping the target federal funds rate range between 3.5 percent and 3.75 percent.
The meeting summary, released on April 8, suggested that most participants believed the war—now in its sixth week—could require rate cuts if higher gasoline prices adversely affect consumer spending or the labor market.
“Most participants raised the concern that a protracted conflict in the Middle East could lead to a further softening in labor market conditions, which could warrant additional rate cuts, as substantially higher oil prices could reduce households’ purchasing power, tighten financial conditions, and reduce growth abroad,” the document said….
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