MIT Golub Center for Finance and Policy

Federal Reserve on hold as Iran war clouds inflation and labor outlook

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In a recent appearance on Bloomberg’s The Close, MIT Golub Center for Finance and Policy Visiting Scholar Eric Rosengren discussed how the Iran war is making the Fed’s upcoming decision more difficult, reinforcing divisions within the FOMC over inflation and labor market risks.

He noted that energy-related spillovers could keep inflation elevated, while an oil shock and broader disruptions may weaken an already uncertain labor market, leaving policymakers likely to stay on hold until there is greater clarity on the path of the conflict. Watch the interview here.

(The GCFP does not make policy recommendations, and any opinions expressed are those of the authors and not the GCFP.)

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