The Federal Reserve held interest rates steady at Kevin Warsh’s first meeting as chairman Wednesday in a unanimous vote.
At the time President Trump picked Warsh in January, after months of railing against former chair Jerome Powell to slash interest rates, the labor market was showing signs of strain and inflation seemed like it could inch back down after the effects of tariffs wore off.
But the war in Iran has since created the worst-ever energy supply disruption, sending gasoline prices soaring – and reheating inflation above 4% for the first time in three years, according to the May Consumer Price Index.
Though Trump on Sunday announced a deal with Iran to reopen the Strait of Hormuz, analysts have warned it could take months for supplies and prices to stabilize.
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