Quick Read – Trump’s renewed tariff threats revived inflation fears just as the Iran peace deal pushed Brent crude below $80, complicating the Fed’s meeting tomorrow. – Logan already warned rates may need to rise, and Reuters reports some Fed officials may project future hikes…
tomorrow’s dot plot forecasts. – Markets price 100% odds rates hold tomorrow, but a hawkish Fed signal could quickly reverse expectations for second-half rate cuts. – The story out of Iran over the past week seemed straightforward: With all sides agreeing to a truce to negotiate details of a long-lasting peace, oil prices tumbled, inflation pressures looked set to cool, and the pressure under the Federal Reserve raising interest rates tomorrow was released. Brent crude dropped below $80 per barrel after reports said the U.S.-Iran peace framework will quickly reopen the Strait of Hormuz, one of the world’s most important energy shipping routes
Markets welcomed the development because energy costs have been the biggest driver of consumer and producer inflation. Then the narrative changed. President Trump has once again shifted attention back toward tariffs, reviving concerns that import costs could rise just as the Fed meets to decide the future path of interest rates.
For a central bank already worried that inflation is proving stubborn, the timing could hardly be worse. The Fed Was Already Worried About Inflation Investors have spent much of 2026 debating when the Fed might begin cutting rates. As inflation surged, though, the talk turned to just the opposite: rates could actually rise!