- High oil prices In the widespread air strikes in Israel on Iran, it could indicate inflation, which showed signs of cooling despite President Donald Trump’s tariff. Israel indicated that its attacks will continue, increase risk oil prices will remain high and withdraw inflation as well, preventing the federal reserve from lowering interest rates.
Israel’s large -scale attacks on Iran sent High oil pricesAnd the possibility of a long conflict that keeps raw higher can spread the hopes of discounts in prices from the federal reserve.
West Texas Interidia and Brent Crude jumped about 6 % on Friday to $ 72.11 and $ 73.46 a barrel, respectively. This comes after months of defeated prices in keeping inflation under selection, although concerns that President Donald Trump’s tariff will add upward pressure.
Less readings than expected earlier this week Consumer and product prices Hopes that the Federal Reserve has sparked more mice to reduce interest rates later this year.
But those hopes suddenly fell up after Israel fired air strikes across Iran early on Friday, targeting nuclear weapons facilities and the Supreme Military Command.
The return of the Treasury Ministry jumped for 10 years 6.9 basis points on Friday to $ 4.426, which reflected a decrease in the aftermath of the attacks directly, as the broken optimism was cooled.
Prime Minister Benjamin Netanyahu indicated that the Israeli attack will continue as long as it is necessary to eliminate Iran’s nuclear threat.
Iran has already retaliated by launching drone attacks and canceling another round of talks with US officials due to the reduction of sanctions on Tehran in exchange for concessions in the Iranian nuclear program.
This places the area for a possible contradiction, and keeps pressure on oil prices and inflation. Although Israel has not yet targeted Iran’s production and export facilities in Iran, such an attack or Iran prohibits the Strait of Hormuz, a major strangulation point in the global oil trade, which could rise by crude by $ 20 per barrel or more.
According to Capital Economics, a height to between 80 to $ 100 a barrel can add up to 1.0 ° C in inflation in advanced markets.
“We doubt that such a rise in prices will lead to more OPEC+ production online, which limits the length of inflation.” “But any increase in energy enlargement will be another reason for central banks to move forward with caution while lowering interest rates, and for the federal reserve to remain margin at the present time.”
With the risk of stagnation as Trump has fallen from the most aggressive tariff rates, any interest rates must come from continuous inflation in inflation.
After the latest inflation data, Trump continued the head of the Federal Reserve, Jerome Powell About price reduction, before the Federal Open Market Committee meeting next week.
Political makers are expected to retain the rates again amid fears that may have a greater impact on prices throughout the summer, when companies are depleted from the pre -party stocks and are no longer able to eat the cost of higher duties.
This story was originally shown on Fortune.com
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