Analysts: With the escalation of tensions in Iran, the Federal Reserve's interest rate cut plans may change.

Gate News bot message, The Federal Reserve (FED) is expected to maintain the current Intrerest Rate level in its latest decision this week. The market's focus will be on whether the FED 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 advance their expectations for the next interest rate cut. The money market has fully priced in the possibility of a rate cut in October this year, with a significant chance of action as early as September. Previously, the market widely expected that a rate cut would not occur until December.

Citigroup analysts point out that the market may currently underestimate the risk of interest rate cuts. However, the increase in tariffs in the United States may drive up inflation, and if tensions between the U.S. and Iran escalate further, leading to continued rising oil prices, this could further delay the Federal Reserve's interest rate cuts.

Analysts from Allianz stated that against the backdrop of high inflation, the Federal Reserve (FED) is unlikely to hastily relax monetary policy.

Source: Jinshi