Analyst: With escalating tensions in the Middle East, the Federal Reserve's plan to cut interest rates may change

ChainCatcher reports that the Federal Reserve is expected to maintain the current interest rate level in its latest decision this week. Market attention will focus on whether the Fed will signal any timing regarding future rate cuts. Recent CPI and PPI data came in weaker than expected, prompting market participants to bring forward their expectations for the next rate cut. The money market has fully priced in the possibility of a rate cut in October this year, with a significant probability of action as early as September. Previously, the market generally expected a rate cut only in December. Citi analysts pointed out that the market may currently be underestimating the risk of rate cuts. However, additional tariffs imposed by the U.S. could drive inflation higher. If tensions between Iran escalate further, causing oil prices to continue rising, this could further delay the Fed’s rate cut pace. Allianz analysts stated that against the backdrop of high inflation, the Fed is unlikely to hastily loosen monetary policy.