Fed Frustrated with Inflation, But Rates Unchanged for Now
Federal Reserve policymakers are growing increasingly frustrated with high inflation rates, but they may not take action to address it, at least not yet. The central bank's rate-setting committee is expected to keep benchmark interest rates unchanged this week.
Despite Fed Chairman Kevin Warsh's statement that he has 'no tolerance' for elevated inflation, policymakers are hesitant to disrupt financial markets with a sudden rate hike. Only 29% of Wall Street traders predict a rate increase this week, but 76% foresee a rate hike in September.
The uncertainty surrounding the Iran war and its impact on oil prices is adding to the Fed's dilemma. The price of oil briefly surpassed $100 a barrel last week due to intensifying fighting, and energy prices have since fluctuated depending on the state of negotiations to de-escalate the conflict.