Institution: Low Probability of Fed Rate Cuts in First Half of Year, Full-Year Zero Rate Cut Not Ruled Out | Home Guy Finance

How will the US-Israel-Iran war affect the Federal Reserve’s interest rate decisions?

【Homebody Finance | Expert Face-to-Face】 At midnight Beijing time on March 19, the Federal Reserve announced that interest rates will remain unchanged, marking the second consecutive pause this year.

Senior Researcher Liu Tao from Guangkai’s Chief Production and Research Institute stated that although the March dot plot maintained the median expectation of one rate cut this year, the divergence among voting members has narrowed compared to previous meetings, and overall, members are becoming more cautious.

Liu Tao believes that since peace has not yet appeared in the US-Israel-Iran war in the short term, the likelihood of a rate cut by the Federal Reserve in the first half of the year is low. Whether there will be a rate cut in the second half depends on the progress and impact of the war. Currently, both sides have substantially entered a phase of large-scale mutual attacks on oil and gas facilities. Even if the war ends in the first half, oil and gas supplies in the Middle East may not fully recover within the year. At that time, a zero rate cut for the entire year cannot be ruled out.

The views expressed in this article are for reference only and do not constitute investment advice. Investing involves risks; please proceed with caution.

(Produced by Zhang Ning, edited by Dong Xiangyi, Homebody Finance Production)