The US-Israel war with Iran has made the appointment of the next Federal Reserve chair, Kevin Warsh, by President Donald Trump's nominee. This uncertainty could make it harder for the Fed to deliver on maintaining its benchmark lending rate. Economists now suggest that the central bank needs to see how the conflict affects the US economy. This comes after the Supreme Court ruled that a majority of Trump's tariffs were illegal. Warsh's claim that AI-driven productivity could pave the way for lower interest rates was dismissed by several Fed officials, including Fed Governor Michael Barr and Cleveland Fed President Beth Hammack. The war's impact on inflation depends on its severity and duration and the magnitude of the disruption at the Strait of Hormuz.