Inflation

Federal Reserve Gov. Stephen Miran Thursday said that the Iran war and tariffs will not have long-term impacts on inflation, but did say he is reconsidering his rate cut outlook for the year.

The setback pared a weekly gain for US government bonds sparked by an April 8 ceasefire agreement, which caused oil prices to tumble from near multiyear highs.

A 21.2% spike in the price of gasoline was the biggest contributor to a 0.9% increase in the Consumer Price Index in March, according to a Friday report from the Bureau of Labor Statistics. The agency said other price increases were largely contained.

Two former members of the Federal Open Market Committee said in interviews that they expect the Federal Reserve to keep rates steady amid uncertainty over the ongoing war with Iran and the resulting upward pressure on inflation.

In three separate appearances Thursday, Fed Gov. Lisa Cook, Gov. Michael Barr and Vice Chair Philip Jefferson said they are worried that U.S. involvement in the war with Iran could drive up inflation, leading them to conclude that interest rates should remain steady in the near term.

The Federal Open Market Committee is widely expected to keep rates unchanged, but all eyes will be on Federal Reserve Chair Jerome Powell's commentary about the economic impacts of the Iran war and its longer-term impact on inflation.

Treasury Secretary Scott Bessent said in a public appearance in Dallas Friday that the administration will seek alternative means of enacting the White House's tariff agenda after the Supreme Court struck down the tariffs as outside the bounds of the law.

The Bureau of Labor Statistics released its January Consumer Price Index Friday, showing that inflation rose 0.2%, while the annual rate eased to 2.4% after holding at 2.7% for several months. The data reduces the likelihood that the Federal Reserve will cut interest rates in the near future. 

Federal Reserve Gov. Lisa Cook said in a speech Wednesday night that the central bank's credibility depends on its ability to bring inflation back to its 2% target.

Treasury Secretary Scott Bessent said the Federal Reserve Board should reject the renomination of any regional Federal Reserve Bank presidents who have not lived in their districts for three years, signaling a potential confrontation when reappointments come before the board in February.

The Bureau of Labor Statistics released its latest Consumer Price Index reading Friday morning, showing inflation rose by 0.3% in September, slightly below August's pace. The report also found core inflation steady at 3.0%, even as shelter costs eased and gasoline prices spiked.

Federal Reserve Vice Chair Philip Jefferson said Friday that the economic outlook is uncertain and that he was adopting a cautious approach to gauging whether slowing growth and a softening labor market outweigh inflation pressures from tariffs.

Investors are anticipating the annual preliminary benchmark revision of US payrolls data. Further signs of softening could further raise expectations for Fed easing.

The Bureau of Labor Statistics said the consumer price index rose to 0.3% in June to an annualized rate of 2.7%, making the case to cut interest rates more difficult for the Federal Reserve to justify at its next meeting later this month.

The Federal Reserve's preferred measure of inflation moved further from its 2% target, underscoring the central bank's reluctance to cut rates.

Federal Reserve Vice Chair Philip Jefferson said in a speech Wednesday that elevated tariffs will likely lead to inflation, but time will tell how impactful that spike in prices might be.

Price growth continued to trend toward the Federal Reserve's 2% target, but not enough to spur action from the central bank.

Federal Reserve Gov. Michael Barr said global supply chain disruptions and inflation caused by tariffs could weigh heaviest on small businesses, especially those with little access to credit.

The central bank wants to let Trump's policies play out across the economy before deciding which way to move interest rates, and it's too soon to know what the impacts will be, the Federal Reserve chair said.

The personal consumption expenditures index showed headline inflation flat at 2.5%, but the details of the report explain the Federal Reserve's reluctance to adjust interest rates.