The Federal Reserve voted to hold the overnight borrowing rate steady Wednesday, which analysts had widely expected. Mortgage rates increased in the lead up to today’s Fed meeting, as markets prepared for rising inflation fueled by spiking oil prices.
When oil costs rise, it becomes more expensive to produce and ship goods, pushing up inflation. Though we’re nearly three weeks into a war with Iran, it’s too early to measure the full impact on inflation; March’s Personal Consumption and Expenditures price index (the Fed’s preferred inflation gauge) won’t be released until April 9. Central bankers are unlikely to make any significant moves until there’s enough data to chart a trend.
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