Analysts: As tensions escalate between the US and Iran, the Federal Reserve's interest rate cut plans may change.

On June 16, Jin10 reported that the Federal Reserve is expected to maintain the current interest rate level in its latest decision this week. The focus of the market will be on whether the Federal Reserve will provide any signals regarding the timing of future rate cuts. Recent CPI and PPI data have been weaker than expected, prompting market participants to bring forward their expectations for the next rate cut. The money market has fully priced in the possibility of a rate cut in October this year, and there is even a significant chance that action could be taken in September. Previously, the market generally expected a rate cut to occur in December. Citigroup analysts pointed out that the market may currently be underestimating the risks of a rate cut. However, U.S. tariffs may drive up inflation, and if tensions between the U.S. and Iran escalate further, leading to a continued rise in oil prices, this could further delay the Federal Reserve's rate cut pace. Allianz analysts noted that amid high inflation, the Federal Reserve is unlikely to hastily relax monetary policy.