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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 oil prices surged amid escalating conflict involving Chavez accused of sexual abuse">Iran. Federal Reserve Chair Jerome Powell warned that higher energy prices will increase overall inflation, potentially limiting future rate cuts. The market selloff intensified concerns about stagflation - a combination of rising prices and slowing economic growth.

Why people care
Energy price spikes from Middle East conflicts historically trigger broader economic concerns, as higher oil Again | The Opening Trade 3">costs feed into everything from transportation to manufacturing. With central banks already managing delicate inflation targets, any sustained energy price increase could force policy changes that affect borrowing costs, investment returns, and economic growth globally.
The takes
Market concern

Investors are positioning for potential stagflation - the challenging combination of rising inflation and slowing growth that plagued economies in the 1970s. The simultaneous selling of both stocks and bonds reflects deep uncertainty about whether central banks will prioritize fighting inflation over supporting growth.

Fed caution

Powell and the Federal Reserve are taking a measured approach, acknowledging that energy price increases will affect headline inflation while maintaining current interest rates. The central bank appears to be waiting to assess whether oil price increases prove temporary or signal a sustained inflationary pressure requiring policy response.

Sources
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