The reopening of the Strait of Hormuz and falling oil prices have boosted bets that the U.S. Federal Reserve may begin reducing interest rates by December. However, officials face a complex outlook ahead of their April 28-29 policy meeting. They will need to assess the impact of the seven-week conflict on underlying price trends, whether hostilities are over, and whether inflation will decline to its 2% target. San Francisco Fed President Mary Daly noted that the evolution of the conflict and the potential response of oil prices if hostilities are to lessen could influence Fed confidence in easing inflation.