The minutes of the Fed’s mid-March meeting suggest that the spike in oil prices led to more concern about the upside risks to inflation than the downside risks to the labour market, with “some” participants judging that there was a “strong case for a two-sided description of the Committee's future interest rate decisions in the postmeeting statement”, which is a slightly stronger qualifier than the “several” participants who supported that change in January. Nonetheless, if the two-week ceasefire agreed between the US, Israel and Iran holds – which would be more or less in line with our baseline scenario assumptions – then it still seems likely that the Fed’s next move will be a cut.
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