June 15, 2025
The National recently published an article featuring Jay Zagorsky, Clinical Associate Professor of Markets, Public Policy, and Law, discussing how The Federal Reserve is expected to keep interest rates steady this week amid rising geopolitical tensions and economic uncertainty.
Ongoing conflict between Israel and Iran has driven up oil prices, adding inflationary pressure to an already uncertain economic landscape shaped by President Trump’s tariff policies. Despite recent signs of easing inflation and slowing job growth, the Fed remains cautious, with rates holding at 4.33% and inflation still above its 2% target.
“I think, if anything, inflation is going to tick a little bit higher, because oil prices are going to be a little bit higher in the near-term. If I was sitting there in that room … I would say I’m a little concerned about inflation,” Zagorsky adds.
Attention now turns to the Fed’s updated economic projections, which may show weaker growth expectations and just one rate cut before year’s end. The World Bank recently lowered its 2025 U.S. growth forecast to 1.4%, citing rising trade barriers and financial market volatility.
