Austan Goolsbee, president of the Federal Reserve Bank of Chicago, warned this week that rate cuts may be pushed out as far as 2027 if the Iran‑related oil shock keeps inflation stubbornly above target. Speaking at the Semafor World Economy conference, Goolsbee said “it’s our job to get inflation back to 2%,” and cautioned that persistently expensive energy could “start pushing” potential rate cuts “out of ’26.” He added to the AP that he had previously expected tariff‑driven inflation to ease and even saw room for “multiple rate cuts in 2026,” but “the longer inflation stays up…that starts pushing it out of ’26.” The Fed is currently holding its benchmark federal funds rate at 3.50%–3.75% after leaving policy unchanged in March, even as the Iran conflict briefly drove oil toward triple‑digit levels. Minutes from that March meeting showed policymakers were concerned that the war’s hit to energy supplies could keep inflation above the 2% goal for longer — and might “call for rate hikes” if price pressures don’t ease. Federal Reserve projections have already been revised: policymakers now put 2026 inflation at about 2.7%, reflecting the risk that gasoline and other energy costs slow the disinflation the market had hoped would permit earlier easing. Traders, who at one point priced in four rate cuts for 2026, have pared expectations back to a single move after oil spiked to roughly $115 per barrel and headline inflation moved closer to 3%. Goolsbee stressed that if inflation “stays elevated” and the Fed “never got to see the decrease in inflation,” optimism about near‑term easing would vanish and officials would keep policy restrictive. Fed Chair Jerome Powell has made a similar point, saying the Iran war leaves the central bank with “limited flexibility” to cut rates until there is clear evidence inflation is sustainably returning to 2%. What crypto market participants should watch: delayed rate cuts and higher-for-longer rates typically tighten financial conditions, which can pressure risk assets including cryptocurrencies. Higher energy prices can also raise costs for crypto miners. Conversely, persistent inflation may keep some investors interested in inflation‑sensitive assets. None of this is investment advice, but the Fed’s evolving outlook on rates and energy risks is likely to be a major driver of crypto market sentiment in the months ahead. Read more AI-generated news on: undefined/news