Yahoo Finance’s Jake Conley takes a look at the pivotal events for markets this week:
In the week ahead, all eyes will be on the Fed meeting — and what Chair Jerome Powell does or doesn’t say about the impact of the war in Iran on inflation in his second-to-last meeting as chair.
… Three weeks in, the war in Iran is showing no signs of slowing down, and the Strait of Hormuz, the world’s most important shipping chokepoint for the global energy industry, remains at a standstill.
Last Sunday, oil prices jumped over the critical $100 per barrel mark for the first time since the energy crisis kicked off by the 2022 Russian invasion of Ukraine. Prices quickly cooled off into the $80s, but drone strikes on critical infrastructure, force majeure declarations from major refineries and export terminals, and a growing list of production cuts throughout the Gulf states have sent prices right back up.
… The past week’s dual inflation readings both told the same story: Inflation is remaining stickily above the Fed’s 2% target rate for rising prices.
“Looking ahead, risks to the inflation outlook remain skewed to the upside,” John Lloyd, global head of multi-sector credit at Janus Henderson Investors, said. Add in rising oil prices, and that “raises the possibility that inflation could remain elevated for longer.”