Fed Chair Powell Cautions That Economic Fallout From Iran Conflict Remains Unclear

Jerome Powell told a Harvard University audience that the United States central bank cannot yet gauge the economic repercussions of the war with Iran. He highlighted that while monetary policy influences demand, the recent surge in oil prices represents a supply shock that could reshape inflation expectations.

• Jerome Powell stated that the economic impact of the Iran war cannot yet be quantified.
• He clarified that the Fed’s rate policy mainly influences demand, not supply.
• The recent climb in oil prices is identified as a supply shock that could affect inflation expectations.
• Powell called for careful monitoring of oil‑driven price pressures.
• His remarks suggest limited ability of monetary policy to counteract supply‑side shocks.