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Clouds of war shroud the economic outlook, and the Federal Reserve’s room for policy maneuvering may be greatly constrained.

Clouds of war shroud the economic outlook, and the Federal Reserve’s room for policy maneuvering may be greatly constrained.

The situation in the Middle East continues to escalate, fundamentally reshaping the Federal Reserve’s policy path. Soaring oil prices, rising inflation expectations, and a weakening labor market are occurring simultaneously, causing expectations for nominee Fed chair Waller to promptly cut interest rates after assuming office to fade significantly. Brent
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