Lates News

The president of the Federal Reserve Bank of Chicago, Gulupsi, said on Tuesday that if the Iran war leads to long-term high oil prices, thus slowing down the process of inflation falling back to the Fed's 2% target, the Fed may need to wait until 2027 to cut interest rates. Gulupsi said during the Semafor World Economic Conference, "I originally thought that there might be multiple rate cuts even in 2026; but if this situation continues and we still do not see inflation declining and inflation remains high, realistically this will push the timing back to after 2026. Our responsibility is to bring inflation back to 2%." Gulupsi was once one of the more optimistic voices within the Fed, believing that inflation driven by tariffs would fall this year, allowing the Fed to resume cutting rates. But now his confidence has waned. He said, "In some cases, interest rates may rise; in other cases, everything may prove to be temporary - if the oil price shocks in the Middle East are resolved and inflation falls again, it looks like we are heading back to our 2% target, so rate cuts will also be back on the agenda."