Fed Seen Holding Rates Amid Oil Surge and Iran War Turbulence

Markets expect the Fed to hold rates at this week’s meeting, but February’s producer price index jumped 3.4% year over year and oil surged on the Iran conflict, adding hawkish risk to the inflation outlook. Oil traded above $109 a barrel, stocks were modestly lower ahead of the decision, and gas prices rose as energy supply concerns persist. February payrolls fell 92,000 and Q4 GDP growth was revised to 0.7%, underscoring a fragile economy. With Powell’s term ending in May and Trump weighing Warsh as successor, Fed independence remains a political issue; markets price in a near-certain hold, though messaging could tilt hawkish if energy inflation accelerates.