Federal Reserve Governor Cook: The situation in Iran has increased the risk of inflation overwhelming employment, and the policy focus is facing a shift.

Federal Reserve Board Governor Lisa Cook said that the current Iran war has shifted the risk balance, with inflation now being a bigger concern for policymakers compared to employment. Cook, speaking after a speech in New Haven, Connecticut on Thursday, stated, "I think the risks of inflation are now higher due to the impact of the Iran war." She also noted, "Regarding the labor market, I think it is in balance, but this balance is very fragile." Following the policy meeting on March 17-18, the Federal Reserve kept interest rates unchanged and emphasized the significant uncertainty caused by the war. The Fed is trying to find a balance between inflation and employment - inflation in January was about 1 percentage point above the 2% target and is expected to rise further with the surge in oil prices; while job growth in the labor market has been extremely weak over the past year. Cook stated that tariffs have pushed inflation away from the Fed's target, and the situation in the Middle East could also have a significant impact. Cook said, "We may keep the current state for much longer than expected. Therefore, I believe the risk balance has now shifted more towards inflation."