Israel-Iran Conflict Risks More Inflation, Delayed Fed Rate Cuts

Israel’s attacks on Iran’s nuclear facilities risk pushing back the timeline for Federal Reserve interest-rate cuts as the US central bank waits to assess any potential impact on inflation, economists said.

Oil prices surged Friday following the strikes, climbing to the highest levels in several months as investors priced in the risk of significant disruptions to the world market. That could add to inflation pressures already building as a result of President Donald Trump’s tariffs on US trading partners, keeping the Fed from making any significant moves in the near term, said Joseph Brusuelas, the chief economist at RSM US LLP.