Federal Reserve Chair Jerome Powell Says Inflation Could Climb Again And It Starts With Energy Prices [Video]

Federal Reserve Chair Jerome Powell explained that instability in the Middle East could start impacting the U.S. economy through energy prices. However, he also made it clear that the full picture is still developing, so the Fed is not rushing to conclusions.

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During Wednesday’s press conference, Powell said, “But the implications of events in the Middle East for the U.S. economy are uncertain. In the near term, higher energy prices will push up overall inflation, but it is too soon to know the scope and duration of the potential effects on the economy.” That statement points straight to oil and gas, because those markets tend to move fast and hit everyday costs just as quickly.

So while inflation had started to cool, this update shows that progress could face setbacks if energy prices keep climbing. Higher fuel costs often spread across the economy because they affect shipping, groceries, and basic living expenses.

However, Powell did not announce any immediate policy shifts. The Fed is still moving carefully, because reacting too aggressively or too slowly could both create pressure on the economy.

For now, the focus stays on energy markets as the US-Israel conflict with Iran pushes through in its third week.