Federal Reserve Chair Jerome Powell stated on Monday, March 30, that the Fed can 'wait and see' how the ongoing Iran war affects inflation and the overall economy. Powell, addressing students at Harvard University, emphasized the uncertainty surrounding the war's economic impact and noted the existing tensions between maintaining low interest rates for employment and preventing inflation hikes.
We're currently experiencing another shock in the form of rising oil prices, following previous shocks from tariffs and the post-COVID economic reopening, Powell explained. He highlighted the importance of observing how these factors evolve before making any policy decisions, indicating the Fed's current stance as a holding pattern.
Powell advised that the Fed should remain focused on its congressional mandate without succumbing to political pressures, such as the recent attacks from US President Donald Trump who has criticized the Fed for potentially harmful policies.