The Federal Reserve’s decision Wednesday to leave its key overnight lending rate unchanged for the second time this year was expected.
But in addition to a disappointing February jobs report and other data, the Fed had to consider a new factor creating economic uncertainty: the attacks on Iran by the US and Israel, which have increased geopolitical stability and world oil prices – all of which point to potentially higher inflation and increased job losses if the conflict – and its domino effects – are protracted.
The Fed’s rate pause —and expectations that it may not lower rates again any time soon – is a