Odds for interest-rate cut in 2026 triple amid Iran war uncertainty
Airfind news item
By Taylor Herzlich
Published on April 8, 2026.
The US and Israel's war with Iran has resulted in uncertainty surrounding the situation, with the start of a two-week cease-fire resulting in a potential interest-rate cut in 2026. Most policymakers at the March 17-18 meeting stated that the conflict could result in lower rates. Central bankers said they would need to remain flexible as they assesses the impact of the war on inflation and the labor market. Economists have warned that Iran's blockade of the Strait of Hormuz could potentially increase inflation, potentially preventing the Fed from lowering rates. The odds of at least one rate cut by December jumped to 43% on Wednesday, a significant increase from just 14% the previous day. Despite this uncertainty, there is still significant uncertainty about the ceasefire and whether it will last.
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