Energy & Trade — 2026-04-07

JPMorgan CEO Warns Iran War May Drive Inflation and Interest Rates Higher Than Expected

JPMorgan Chase CEO Jamie Dimon warned that the Iran war could produce sustained oil and commodity price shocks, keeping inflation elevated and pushing interest rates above market expectations. The Federal Reserve held rates at 3.5-3.75%, projecting 2.7% year-end inflation. The OECD revised its US inflation forecast to 4.2%, up 1.2 percentage points from pre-war estimates. CME FedWatch now predicts no rate cuts in 2026. Chicago Fed President Goolsbee separately flagged Iran-driven inflation as the primary risk to any easing cycle.

Analysis
The Fed holding at 3.5-3.75% while projecting 4.2% inflation puts monetary policy in a bind: cutting risks fueling inflation further, while holding risks deepening a potential recession if the energy shock persists. CME FedWatch now prices zero cuts for 2026. This is a materially different economic environment than 30 days ago.

2 sources

JPMorgan's Dimon warns Iran war could push inflation and interest rates higher - Fox Business
Chicago Fed President sees inflation from Iran war as risk to 2026 rate cuts - CBS News