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Watch live: Powell gives remarks as Federal Reserve keeps rates steady amid Iran conflict

What happened

Global stocks and bonds fell sharply as escalating conflict involving trump-considers-draft-for-iran-war-as-oil-hits-119.html" class="story-link" title="Trump hasn’t ruled out a draft for war with Iran — but is conscription constitut">Iran drove oil and gas prices higher. Federal Reserve Chair Jerome Powell warned that rising energy costs could fuel inflation and limit potential rate cuts. The market selloff reflects growing concerns that Middle East tensions could derail economic recovery plans.

Why people care
Energy price spikes from Middle East conflicts Accidentally Leaks Earl">have historically triggered major economic disruptions, from recession to stagflation. With central banks already navigating delicate inflation battles, this surge threatens to complicate monetary policy and potentially delay expected rate cuts that markets have been counting on.
The takes
Markets say

The selloff reflects legitimate concerns about supply chain disruptions and energy costs that could reignite inflation just as it was coming under control. Investors are rightfully pricing in risks of prolonged conflict affecting global oil supplies and forcing central banks to maintain tighter monetary policy longer than expected.

Fed officials suggest

While energy price increases will impact headline inflation temporarily, core economic fundamentals remain sound. Central banks have tools to manage through energy-driven inflation spikes, and markets may be overreacting to what could prove to be a temporary disruption rather than a fundamental shift in economic trajectory.

Sources
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