Federal Reserve meeting minutes: policymakers are concerned about the dual risks of a war with Iran.

After the outbreak of the Iran war, Federal Reserve officials weighed different scenarios facing the US economy, including both scenarios that may require a rate cut and scenarios that may require a rate hike. Minutes from the March FOMC meeting released on Wednesday showed that most officials were concerned that the war could impact the labor market, necessitating a rate cut. At the same time, many officials also emphasized the risk of inflation, which might eventually require a rate hike in response. The minutes revealed that an increasing number of officials suggested including relevant statements in the post-meeting statement, mentioning the possibility of a rate hike under certain conditions. The minutes stated, "Some participants believed there were good reasons to provide a balanced description in the post-meeting statement with respect to future rate decisions to reflect that an increase in the target range for the federal funds rate could be appropriate in the situation where inflation remains persistently above the Committee's symmetric 2 percent objective." Following the March meeting, several Fed policymakers have indicated a preference to maintain rates unchanged while assessing the impact of the war. Overall, policymakers' response to the war reflects their concern about the risks to their dual mandate. The minutes stated, "The overwhelming majority of participants viewed the risks to upward inflation and downward employment as being at elevated levels, with most participants noting that these risks had risen further as the situation in the Middle East evolved." At the March meeting, Federal Reserve officials kept the benchmark policy rate in the range of 3.5% to 3.75%.