[Former Powell Advisor: The Situation in the Middle East is the "Major Variable" for the Federal Reserve] The situation in the Middle East is becoming a "major variable" for the Federal Reserve. Jon Faust, a researcher at the Johns Hopkins University Center for Financial Economics and a former senior advisor to Federal Reserve Chairman Powell, stated that the Iran conflict "could lead to soaring oil prices, a collapse in market confidence, and even trigger an economic recession," but its ultimate impact remains difficult to predict.
He pointed out in an interview: "Economic recessions often begin with some kind of shock - the Middle East may be brewing such a crisis now, and the probability has slightly increased compared to before." The Federal Reserve (FED) will hold a monetary policy meeting from Tuesday to Wednesday this week, and the market generally expects the benchmark interest rate to remain in the range of 4.25%-4.5% for the fourth consecutive time.
Foster believes that the core suspense of this week's meeting lies in whether Powell will release a clearer signal: is the risk of inflation rebound greater, or is the weakness in the labor market more concerning? "This will reveal the Federal Reserve's policy direction for the second half of the year." He added that the Federal Reserve has not yet shown a clear inclination towards either side.
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Former Powell Advisor: Middle East Situation is the "Main Variable" for the Federal Reserve (FED)
[Former Powell Advisor: The Situation in the Middle East is the "Major Variable" for the Federal Reserve] The situation in the Middle East is becoming a "major variable" for the Federal Reserve. Jon Faust, a researcher at the Johns Hopkins University Center for Financial Economics and a former senior advisor to Federal Reserve Chairman Powell, stated that the Iran conflict "could lead to soaring oil prices, a collapse in market confidence, and even trigger an economic recession," but its ultimate impact remains difficult to predict. He pointed out in an interview: "Economic recessions often begin with some kind of shock - the Middle East may be brewing such a crisis now, and the probability has slightly increased compared to before." The Federal Reserve (FED) will hold a monetary policy meeting from Tuesday to Wednesday this week, and the market generally expects the benchmark interest rate to remain in the range of 4.25%-4.5% for the fourth consecutive time. Foster believes that the core suspense of this week's meeting lies in whether Powell will release a clearer signal: is the risk of inflation rebound greater, or is the weakness in the labor market more concerning? "This will reveal the Federal Reserve's policy direction for the second half of the year." He added that the Federal Reserve has not yet shown a clear inclination towards either side.