Fed director: interest rate cuts still possible despite war with Iran

Federal Reserve Director Stephen Miran thinks interest rate cuts are still on the table, despite the war with Iran. According to him, it is too early to conclude that the conflict will have a major impact on the American economy. He said this in an interview with Bloomberg TV.

Other Fed members are more cautious

Miran’s statements contrast with the tone of other Fed officials. They warned this week that the war creates additional uncertainty for the economic prospects.

Oil prices have risen sharply following the US and Israeli attacks on Iran, fueling inflation concerns. Investors have therefore become more cautious about their expectations for interest rate cuts in 2026.

Miran: labor market still needs support

Miran looks at this differently. According to him, labor market figures still indicate that the economy needs additional support. He sees no signs so far that events in the Middle East are changing his expectations for inflation or employment.

Jobs report Friday could be decisive

Investors are now looking forward to the February jobs report, which will be released on Friday. These figures can play an important role in the Fed’s interest rate policy. If job growth and wages are better than expected, the chance of an interest rate cut increases. If they are disappointing, the hawks within the Fed will have more ammunition to wait longer.