The US central bank remains cautious amid uncertainties stemming from the conflict with Iran. It continues to weigh monetary easing while monitoring inflationary risks.
Federal Reserve officials continue to anticipate an interest rate cut, despite a backdrop marked by rising energy prices and trade tensions. According to the minutes of the March meeting, a majority believes that easing could become necessary if these factors were to weigh on consumption and employment. The central scenario remains a single cut in 2026, while the benchmark rate was maintained between 3.5% and 3.75% by an 11-to-1 vote.
The conflict in the Middle East represents a major source of uncertainty, particularly due to its impact on oil prices. A prolonged spike could weaken purchasing power and slow growth. Conversely, however, some officials fear more persistent inflation, which could justify keeping rates high for longer, or even further tightening.
In this context, the Fed is adopting a cautious stance, emphasizing the need to remain flexible. The US economy is showing signs of a slowdown, with growth limited to 0.7% in Q4 2025 and expected to be around 1.3% in early 2026. The labor market, while appearing stable, shows underlying fragilities, reinforcing uncertainty over the future trajectory of monetary policy.
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