Fed split on rate cuts as war in Gulf lifts oil prices, clouds outlook

Governor Miran supports easing but some policymakers remain cautious

- BY JUSTIN VARGHESE

Fed officials are divided on what to do with interest rates as the Middle East conflict pushes oil prices higher.

Federal Reserve officials are increasingly divided over the path of US interest rates as a widening conflict in the Middle East pushes oil prices higher, reshapes market expectations and injects fresh uncertainty into the outlook for inflation and growth.

While some policymakers say the surge in energy costs could complicate efforts to bring inflation back to target, Federal Reserve Governor Stephen Miran said the geopolitical shock has not yet changed his view that monetary policy should continue easing to support the labour market.

“I believe it’s appropriate to continue acting,” Miran said Wednesday in an interview with Bloomberg Television, referring to the case for further interest-rate cuts.