Vishnu Varathan of Mizuho Securities said the Federal Reserve faces “extremely
low visibility” on the rate path amid the Iran war. Fed Chair Jerome Powell
noted a rate hike was discussed but is not the base case. The conflict sharpens
the Fed’s dilemma, as energy shocks could lift inflation while squeezing demand,
growth and jobs. With risks pulling in opposite directions, Varathan said the
Fed is likely to pause and assess for now.
