Fed Expected to Hold Rates Steady Due to War, Energy Shock

• Fed expected to hold rates steady but will release new forecasts indicating higher headline inflation and lower growth outlook.
• The Iran-Israel war and oil shock (potential $100/barrel oil) are seen as a 'tax' on consumers and businesses, impacting growth.
• Inflation, especially in the services sector (insurance, education, healthcare), is described as 'real, sticky, and persistent,' leading to 'hawks' dominating the FOMC debate.

The discussion centers on the upcoming Federal Reserve rate decision, anticipating steady rates but new forecasts showing increased inflation and reduced growth due to the Middle East war and oil shock. Persistent inflation, particularly in services, is keeping 'hawks' in control of the FOMC, suggesting a challenging path for the Fed to meet its inflation target.