Rising energy prices due to the Middle East war will increase inflation “in the short term” in the United States, Federal Reserve chairman Jerome Powell said today.
“The repercussions of events in the Middle East on the American economy are uncertain. In the short term, the increase in energy prices will push up overall inflation,” he said at a press conference following the Federal Open Market Committee (FOMC) meeting.
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However, it is “too early to determine the magnitude and duration of the potential effects on the economy,” he added.
Powell said the slight increase in prices projected by the institution for this year already reflects the impact of rising oil prices from the war against Iran. The Fed’s inflation forecasts — which reflect an increase of two tenths of a percentage point to 2.7% for core inflation this year — are “without doubt linked to events in the Middle East and the price of oil,” he said.
