Analyst: Rising Tensions in Iran Could Disrupt the Federal Reserve's Rate Cut Plans

BlockBeats has reported that on June 16th, it is expected that the Federal Reserve will keep the current interest rate levels unchanged in its latest policy decision this week. The market's attention will be on whether the Fed gives any indication of the timing for future rate cuts. Recently released CPI and PPI data were weaker than expected, which has prompted market participants to advance their expectations for the next rate cut. The money markets have already priced in a high probability of a rate cut by October this year, and there are also some chances of action as early as September. Previously, the prevailing market expectation was for a rate cut to occur in December. Citigroup analysts pointed out that the market may be underestimating the risk of rate cuts. However, if the US imposes higher tariffs, it could push inflation higher. And if the tensions between the US and Iran escalate further, causing oil prices to rise, this could further delay the Fed's rate-cutting timeline. Allianz analysts noted that in the context of elevated inflation, the Federal Reserve is unlikely to hastily loosen monetary policy. (Jin10)