US Treasury warns against rate hikes during US-Iran war energy ‘shock’
Summary
Treasury Secretary Scott Bessent urged the Federal Reserve not to raise interest rates in response to an energy supply shock linked to the US-led conflict with Iran. The Fed has kept its benchmark rate at 3.75% to 4%, while strong job growth and rising consumer prices have added to pressure for a rate increase.Key Facts
- Bessent said the Fed should look ahead because energy-price increases may ease.
- The Fed held rates at 3.75% to 4% at its most recent policy meeting.
- CME FedWatch put the chance of a rate increase to 4%–4.25% at the December meeting at 89.4%.
- The US economy added 165,000 jobs in October, according to the Labour Department.
- Fed Governor Christopher Waller said he planned to support a quarter-point rate increase in December, and that a half-point increase should be considered if core inflation reached 0.3% or more.
- The latest consumer price index report showed a 0.4% monthly increase.
- Average US petrol prices were $3.87 per gallon, down from $4.34 a month earlier but above the $2.98 recorded on February 28.
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