Yellen Foresees Fed Rate Cut Amidst Iran Conflict Pressure

In light of the ongoing inflationary pressure caused by the Iran war, former U.S. Treasury Secretary Janet Yellen forecasts at least one interest rate cut by the Federal Reserve this year. Speaking at the HSBC Global Investment Summit in Hong Kong, Yellen highlighted the Fed's vigilant monitoring of short-term inflation trends.

Despite the geopolitical tensions, Fed policymakers decided in March to maintain the benchmark interest rates between 3.50% and 3.75%. Meanwhile, political pressure mounts from President Donald Trump, who has criticized Fed Chair Jerome Powell for not pursuing deeper cuts in interest rates, which he deems necessary for the U.S. economy.

The recent surge in crude oil prices, coupled with the Middle East conflict's economic uncertainties, continues to elevate inflation risks. Yellen addressed the implications of this broad supply shock on global financial markets and expressed concern over potential disruptions to the U.S.-China trade relationship.