Fed Faces December Rate Hike Bets as Iran-Linked Energy Surge Keeps Inflation Above 2%
Updated
Updated · Bloomberg · May 26
Fed Faces December Rate Hike Bets as Iran-Linked Energy Surge Keeps Inflation Above 2%
8 articles · Updated · Bloomberg · May 26
December futures pricing now implies a Federal Reserve rate hike, a sharp shift from expectations just months ago that had left room for cuts.
Energy prices have stayed elevated after the US-Israeli conflict with Iran, keeping inflation well above the Fed’s 2% target and likely pushing it higher in May data.
Kevin Warsh enters his first full week as Fed chair with that hawkish backdrop challenging his earlier signals that lower rates were possible.
Warsh also pledged to reduce the Fed’s use of forward guidance, leaving him likely to retreat either on the prospect of easier policy or on limiting communication as markets harden.
With inflation fueled by global conflict, will the new Fed Chair abandon his low-rate promises for a hawkish pivot?
Can Fed rate hikes cool inflation driven by war and tariffs, or will they only risk triggering a deep recession?
Is the promise of AI productivity a real solution to inflation, or a dangerous distraction from necessary rate hikes?