Senior strategist Yardeni warns that the collapse of the US-Iran ceasefire could push up inflation and increase pressure on the Federal Reserve to raise interest rates
Market strategist Ed Yardeni said the breakdown of the ceasefire between the United States and Iran could trigger a new round of accelerating inflation, which could force the Federal Reserve to raise interest rates. "Concerns about inflation are rising again, so the Fed is once again in the spotlight," Yardeni said in an interview on Wednesday. "The Fed has not only moved toward tightening, but may actually have to tighten." Yardeni, president and founder of Yardeni Research, made the statement after U.S. President Donald Trump warned that the temporary ceasefire agreement between the United States and Iran may have ended. Trump's comments heightened the risk that peace talks would end and the conflict would escalate again. Previously, the United States launched a new round of attacks on Iran and canceled the exemption that allowed Iranian oil sales. Affected by this, crude oil prices rose sharply, global stock markets fell, and U.S. Treasury bonds hit intraday lows. "This is a geopolitical crisis that lingers and has no end," Yardeni said. "In a sense, we are back to square one, back to where we were in March." Yardeni said that even though the U.S. labor market appears to be solid, "developments in the Middle East could change everything. Consumers are doing well," he said. But risks remain "if gas prices spike again." Open a futures account on Sina's cooperative platform, safe, fast and guaranteed