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2026-04-09 02:06:42
[Fed Meeting Minutes: More Open to March Rate Hike, Inflation Expectations Revised Upward Due to War] (1) On April 8, the minutes of the Fed's March 17-18 meeting showed that more and more policymakers believed that a rate hike might be necessary to deal with inflation that was consistently above the 2% target, especially affected by the war between the US, Israel, and Iran. Some officials advocated leaving the possibility of a rate hike in the statement, whereas only a few officials held this view before March. The war led to a rise in oil prices, which exacerbated the risk of high inflation. (2) The Fed kept the benchmark interest rate stable at 3.50%-3.75% in March. Although concerned about the risk of inflation, many participants still included a rate cut in the benchmark outlook. Most believed that the prolongation of the Middle East conflict would damage economic growth and that more rate cuts might be needed. The day before the minutes were released, the US and Iran reached a two-week ceasefire, and oil prices fell by more than 15% to $92 per barrel. (3) Fed staff expect that the situation in the Middle East, policy changes, and the impact of artificial intelligence may lead to weaker-than-expected economic growth and higher-than-expected inflation. Inflation has been consistently above the target since 2021, posing a more persistent risk.
