Fed officials say they are watching inflation risks from oil and tariffs

Federal Reserve Chair Jerome Powell and other officials said they are monitoring how higher oil prices and tariffs could affect inflation. Powell stated the Fed can 'wait and see' how the conflict in the Middle East impacts prices, while noting that tariffs are already keeping inflation elevated.

Officials indicated they are prepared to respond if needed. Fed official Miran said he raised his projection for future interest rates due to recent inflation data. The central bank is widely expected to hold its main interest rate steady at its upcoming meeting, while weighing the risks from an oil price shock.

The comments suggest the Fed is in a holding pattern, gathering more data before deciding on any changes to interest rates. Financial firms like Goldman Sachs have delayed their forecasts for when the Fed might start cutting rates, citing increased inflation risks from the Middle East conflict.