Federal Reserve Governor Waller is concerned that a war with Iran could lead to the prolonged closure of the Strait of Hormuz, causing inflation and no longer supporting rate cuts
USA - Federal Reserve Board member Christopher Waller said on Friday that he is worried about the war between the US and Israel against Iran leading to the prolonged closure of the Strait of Hormuz, which could affect inflation.
Waller has supported rate cuts since last year, citing concerns about the labor market. However, in the past two weeks, due to inflation risks, he has changed his view on the pace of rate cuts.
He told CNBC in the US on Friday, "Since the Strait of Hormuz closed, this conflict seems to be lasting longer, and oil prices will remain high for a longer period."
"Therefore, the inflation issue is more serious than I previously thought."
Waller supported the Federal Reserve's decision earlier this week to keep interest rates unchanged. The US central bank also raised its inflation expectations for 2026.
When setting interest rates, the Federal Reserve usually ignores short-term price shocks, but Waller said that sustained high oil prices will begin to cause chain inflation effects. He said, "If oil prices are very high and remain high for several months, it will eventually have an impact because oil is a raw material for many products."
Source: rfi
Original: toutiao.com/article/1860223780398092/
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