Washington —
The Federal Reserve has been unusually silent about the future path of interest rates, with Chairman Kevin Warsh offering few signals as policymakers grapple with renewed inflation concerns and a murkier economic outlook.
Fed officials will have a chance to clarify their thinking when they announce their latest rate decision at 2 p.m. ET Wednesday, followed by Warsh’s post-meeting news conference at 2:30 p.m. ET.
Inflation slowed sharply in June, according to the latest Consumer Price Index, largely due to lower energy prices that month as tensions briefly eased in the war with Iran. The encouraging inflation report prompted investors to scale back expectations that the Fed would need to raise interest rates for the first time since July 2023 in order to keep price pressures in check.
But the conflict in the Middle East escalated earlier this month, triggering a spike in global energy prices last week. Tensions have eased in recent days, prompting energy prices to decline accordingly. However, shipping through two key waterways — the Bab al-Mandeb Strait and the Strait of Hormuz — remains subdued. Nearly a quarter of the world’s oil flows through the region. Meanwhile, Fed officials are debating how the rapid adoption of AI could impact inflation.
