Fed's Paulson says useful to consider different scenarios around Iran war; impact of Iran war comes as inflation has been high; there's more risk of faster shift from oil prices into inflation expectations

  • Risk that series of supply shocks drive up inflation.
  • Economy is not creating a lot of jobs right now.
  • Bending but not breaking is still how to view job market.
  • To me, it feels like the job market is fragile.
  • Job market does not feel robust.
  • Very valuable that long-run inflation expectations are anchored.
Context

The comments from Fed's Paulson highlight a cautious stance on the economic outlook, particularly emphasizing the risks of inflation stemming from geopolitical tensions like the Iran war. The mention of a fragile job market suggests an underlying weakness that could influence Fed policy, especially if supply shocks exacerbate inflationary pressures. Overall, while long-run inflation expectations remain anchored, current dynamics could push the Fed to reassess its approach to both rates and economic guidance.

Trade the TapeGet this analysis live, the moment it breaksNewsquawk's real-time dashboard delivers market-moving headlines and instant context to your desk before the rest of the market reacts.
Open Dashboard
#UNITED STATES#USD#JAPAN#UNITED KINGDOM#IMPORTANT#FOREX#FIXED INCOME#ENERGY#EU SESSION#US SESSION#FEDERAL RESERVE#CENTRAL BANK#INFLATION#WTI#COMMODITIES#DXY
Published: Updated: