Fed Expected to Hold Rates Steady as Powell-Warsh Transition Looms

goodinfo.net — Mon, 27 Apr 2026 17:00:00 +0800

📰 Fed Expected to Hold Rates Steady as Powell-Warsh Transition Looms

The Federal Reserve is likely to maintain its wait-and-see approach and leave interest rates unchanged at the conclusion of its two-day meeting on April 29. With the Iran conflict driving up oil prices and inflation concerns, alongside lingering uncertainty about the labor market, the Federal Open Market Committee (FOMC) is widely expected to hold the federal funds rate steady in the 3.5% to 3.75% range.

Rather than the rate decision itself, attention may focus on Chair Jerome Powell’s press conference — potentially his last as Fed chair. Market participants will scrutinize his language for clues about whether officials view inflation or labor market weakness as the greater threat.

Concerns about a slowing labor market and a low-hire environment drove the Fed to cut rates three times late last year. Those concerns haven’t fully dissipated but were somewhat alleviated by the Labor Department’s estimate that U.S. employers added 178,000 jobs in March. Meanwhile, the Consumer Price Index — the department’s inflation measure — surged from 2.4% year-over-year in February to 3.3% in March.

New tariffs from the Trump administration, combined with higher oil prices and war-related supply chain disruptions, are expected to keep prices elevated in the near term. The critical question is whether these inflationary shocks will be temporary or persistent — a distinction that largely depends on the duration of the conflict.

“The ongoing uncertainty relating to the Strait of Hormuz reinforces the case for a Fed that remains on the sidelines — certainly for the upcoming meeting, and in all likelihood, for many months thereafter,” Sue Hill, head of government liquidity group at Federated Hermes, a global investment manager, told USA TODAY.

Treasury Secretary Scott Bessent and Cleveland Fed President Beth Hammack — a voting member on the committee — have both suggested the Fed should pause in April.

Chicago Fed President Austan Goolsbee said the possibility of a stagflation outbreak driven by high oil prices before tariff inflation subsides “keeps him up at night.” However, he noted that Americans’ incomes and the 4.3% unemployment rate remain “strong,” agreeing with Powell that there is no “obvious” path for rates.

As of March 18, committee members’ median expectation for the federal funds rate at the end of 2026 was 3.4%, implying one quarter-point rate cut, though it may not come until the second half of the year.

Source: USA Today - No Fed rate move expected as Powell-Warsh shift looms

UK Minister Warns Iran War Price Impacts Could Last Eight Months

goodinfo.net — Sun, 26 Apr 2026 22:00:00 +0800

UK Minister Warns Iran War Inflation Effects May Persist Through Year-End

On April 26, 2026, a UK government minister warned that supply chain disruptions stemming from the US-Israel military operations against Iran could keep prices elevated for the next eight months. The statement represents one of the most direct official assessments of the economic fallout from the Middle East conflict on British consumers.

Supply Chain Under Severe Strain

Speaking to media on Sunday, the minister said government departments are closely monitoring stock levels of essential goods and developing contingency plans for any potential disruptions to supply chains. The impact of the Iran war on global energy markets and shipping routes has already begun filtering through to British consumer prices, with multiple industries reporting rising raw material costs and transportation delays.

Energy price volatility has been particularly pronounced. As an economy heavily dependent on energy imports, the UK is acutely sensitive to shifts in oil and gas supplies from the Middle East. Since the outbreak of hostilities, international oil prices have experienced sharp swings, directly driving up domestic fuel, electricity, and transport costs.

Food and Consumer Goods Under Pressure

The ripple effects of supply chain disruption are now spreading into food retail. Several major UK supermarket chains have reported shortages and price increases on certain imported goods, particularly food products, electronics, and textiles from the Middle East and Asia. Industry insiders expect this trend to widen if shipping routes remain threatened.

Food industry analysts note that the UK’s food supply chain is highly globalized, with approximately 46% of food consumed in the country being imported. Rising shipping insurance costs and route diversions caused by the war are adding to logistics expenses, which are ultimately passed on to consumers.

Government Response Measures

In response to inflationary pressures, the UK government is implementing a series of countermeasures. The Treasury and the Department for Business and Trade have reportedly activated a cross-departmental emergency mechanism, focusing on monitoring the supply of key commodities including energy, food, and pharmaceuticals. The government is also maintaining close communication with major retailers and logistics companies to ensure supply chain resilience.

Additionally, the government is evaluating whether strategic reserves need to be deployed to cushion short-term supply shocks. Sources indicate officials are considering temporary adjustments to import tariffs on certain critical goods to reduce costs for businesses.

Economic Outlook Uncertainty Grows

Economists have warned that a prolonged Iran conflict could cast a shadow over the UK’s nascent economic recovery. Bank of England policymakers are facing a difficult balancing act: controlling inflation on one hand while avoiding overly restrictive monetary policy that could damage economic growth on the other.

Market analysts note that if the war does not conclude in the near term, UK inflation could climb back above the government’s target level in the coming months. This would add further pressure on household living costs, particularly for lower-income families already struggling with the cost of living crisis.

Source: BBC News - Higher prices could last for eight months after Iran war, minister says

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Fed Expected to Hold Rates Steady as Powell-Warsh Transition Looms