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Source document· March 14, 2026

Trump’s war jolts global central banks from Fed to ECB to BOJ

View original at finance.yahoo.com
Trump’s war jolts global central banks from Fed to ECB to BOJ (Bloomberg) — Central banks from Washington to London to Jakarta are about to make their first assessments of economic damage after more than two weeks of conflict between the US and Iran…
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  • The combination of labor market tremors and Middle East war puts the Fed's dual mandates in conflict, clouding the outlook for rates in the near-term

    60% confidence
  • For the Fed, much depends on how the conflict evolves. If the war ends quickly, we expect the unemployment rate to edge higher and core inflation to cool, allowing rate cuts of about 100 basis points this year. If the conflict drags on, keeping energy prices high and pushing inflation expectations higher, the calculus becomes far more difficult.

    60% confidence
  • The Fed is widely expected to hold rates steady at March 17-18 policy gathering

    60% confidence
  • Economists see a smaller increase in producer price measure of wholesale costs in February than in January, when services prices jumped

    60% confidence
  • For the Fed, much depends on how the conflict evolves. If the war ends quickly, we expect the unemployment rate to edge higher and core inflation to cool, allowing rate cuts of about 100 basis points this year. If the conflict drags on, keeping energy prices high and pushing inflation expectations higher, the calculus becomes far more difficult.

    60% confidence
  • For the Fed, much depends on how the conflict evolves. If the war ends quickly, we expect the unemployment rate to edge higher and core inflation to cool, allowing rate cuts of about 100 basis points this year. If the conflict drags on, keeping energy prices high and pushing inflation expectations higher, the calculus becomes far more difficult.

    60% confidence
  • Decisions in the coming week are likely to confirm to investors that the specter of a new inflation shock is already worrying enough to prompt heightened caution

    60% confidence
  • Interest-rate bets that fully anticipated easing in the US have eroded, while possible hikes in the UK and euro zone later in the year are now being priced in

    60% confidence

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Board of Governors of the Federal Reserve System · interest rate cuts forecast100 basis_points
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