Before the war, Americans were still spending at a robust pace; however, prices continued to rise faster than normal, new data showed Thursday.

An energy shock stemming from the fighting has added a layer of complexity to the Federal Reserve’s decision-making around interest rates.

Federal Reserve policymakers may ​consider cutting interest rates later this year now that an agreement for a two-week ceasefire in the ‌Iran conflict has eased concerns about a resurgence of inflation,

Federal Reserve policymakers sparred during the central bank’s March meeting over how to respond if the Iran war triggers a prolonged period of high energy prices, according to a summary released on Wednesday.

The conflict in the Middle East has left the Federal Reserve braced for higher inflation, upending expectations about if officials will restart interest rate cuts.

A growing number of Federal Reserve officials worried the Iran war could further stoke inflation and wanted to make clear following their March meeting that the central bank may have to consider raising interest rates.

The market's expectations for a rate cut in 2026 doubled after the US and Iran agreed to a two week ceasefire deal.

Fed-funds futures traders are now pricing in a 44.1% chance that the Federal Reserve will cut its key interest rate at least once by year-end, according to CME FedWatch data. That is up from a 14.1% likelihood a day ago.