Fmr. Boston Fed Pres.: Until the Strait of Hormuz fully opens there will still be oil supply shock

• The ongoing energy supply shock, exacerbated by geopolitical events, is expected to be persistent, impacting oil and oil-based products like transportation.
• Core inflation is anticipated to remain at or above 3%, making it challenging for the FOMC to consider rate cuts.
• Rosengren suggests rate cuts are unlikely until the fall, and only if the economy shows significant weakening, which is not currently evident.

Former Boston Fed President Eric Rosengren discusses the persistent energy supply shock due to geopolitical events, which is likely to keep core inflation elevated at 3% or higher. He believes the Federal Reserve will find it difficult to lower interest rates until at least the fall, as the economy has not significantly weakened despite these inflationary pressures.