{"id":70797,"date":"2023-10-10T00:41:24","date_gmt":"2023-10-10T04:41:24","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/an-israel-hamas-war-could-change-what-the-fed-does-about-interest-rates\/"},"modified":"2023-10-10T00:41:26","modified_gmt":"2023-10-10T04:41:26","slug":"an-israel-hamas-war-could-change-what-the-fed-does-about-interest-rates","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=70797","title":{"rendered":"An Israel-Hamas war could change what the Fed does about interest rates"},"content":{"rendered":"
\n

The unfolding conflict between Israel and Hamas has financial markets weighing how a war in the Middle East may impact the Federal Reserve\u2019s next policy steps. <\/p>\n

For now, fed funds futures traders see a higher chance of no further action by the Federal Reserve this year. They boosted the likelihood of a pause in November to 88.5% from 72.9% a day ago, and of no action by December to 74% from 57.6%, according to the CME FedWatch Tool. That would leave the Fed\u2019s main interest-rate target at a 22-year high of between 5.25%-5.5%.<\/p>\n

\n

Read this next: <\/strong>Here\u2019s what Israel-Hamas war means for oil prices as fighting continues<\/p>\n

There\u2019s a pretty big caveat, however. Traders, investors and even the Fed have all been wrong before, particularly when they underestimated the strength and durability of price pressures in the run-up to the current inflation era. So it\u2019s equally possible that the Israel-Hamas war leads to a resurgence of inflation via higher oil prices. Macro strategist Henry Allen and research analyst Cassidy Ainsworth-Grace of Frankfurt-based Deutsche Bank\u00a0
\n DB,
\n -1.40%<\/bg-quote>
\n are warning of the risk that 1970\u2019s-style stagflation \u2014 or an unwelcome mix of inflation and slower growth \u2014 may repeat itself. <\/p>\n

\u201cIt\u2019s too early to say whether the knee-jerk reactions seen in the market on Monday are going to be maintained or accelerate. It depends on how quickly and how far this conflict expands,\u201d said Randal Stephenson, head of investment banking at FE International, a mergers-and-acquisitions advisory firm headquartered in New York. <\/p>\n

In addition to rising market-implied chances of no action by the Fed this year, greater demand was seen for 10- and 30-year Treasury futures, boosting the possibility that those corresponding yields could slip when the cash market reopens on Tuesday. The Treasury market was closed on Monday for\u00a0Columbus Day and Indigenous Peoples Day.<\/p>\n

Gold rallied on its safe-haven appeal and oil prices settled more than 4% higher on Monday. U.S. stocks
\n DJIA<\/p>\n

SPX<\/p>\n

COMP
\n finished with gains in volatile trading as investors focused on remarks from Dallas Fed President Lorie Logan that suggested there may be less need to raise the fed funds rate. Separately, Fed Vice Chair Philip Jefferson said he remains cognizant of the impact higher Treasury yields are having, and will take into account financial-market developments when assessing the future path of policy.<\/p>\n

\u201cThe Fed has had a period over the last year where it probably thought it was achieving what it needed to in order to reduce inflation and have a softer landing,\u201d said Stephenson of FE International. But an unexpected shock like the one over the weekend from the Middle East \u201crisks undermining the efforts of central banks to bring inflation under control.\u201d<\/p>\n

\u201cIf this conflict remains contained between Israel and Hamas, that probably won\u2019t have larger ramifications on financial markets in the longer term,\u201d Stephenson said via phone on Monday. However, \u201cif this conflict spreads to other regions, that could cause a rise in oil prices and that would be inflationary and would affect what the Fed is trying to do.\u201d<\/p>\n

The Fed\u2019s most recent projections, released on Sept. 20, implied there would be one more rate hike by year-end and reflected policy makers\u2019 expectations for inflation to head toward 2% through 2026 and over the longer term.<\/p>\n

Brent Schutte, chief investment officer of the Northwestern Mutual Wealth Management Co. in Milwaukee, said his team is watching the news out of Israel and that \u201cthese tragic events have a very real human impact that we would be remiss not to mention.\u201d<\/p>\n

\u201cThe situation is also already having an impact on markets and could act as a growing headwind, particularly if it spreads,\u201d Schutte said in an email. \u201cWe will be watching the situation and its potential impact on markets closely.\u201d<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The unfolding conflict between Israel and Hamas has financial markets weighing how a war in the Middle East may impact the Federal Reserve\u2019s next policy steps. For now, fed funds futures traders see a higher chance of no further action by the Federal Reserve this year. They boosted the likelihood of a pause in November […]<\/p>\n","protected":false},"author":1,"featured_media":56152,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-70797","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nAn Israel-Hamas war could change what the Fed does about interest rates | iFintechWorld<\/title>\n<meta name=\"description\" content=\"The unfolding conflict between Israel and Hamas has financial markets weighing how a war in the Middle East may impact the Federal Reserve\u2019s next policy\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=70797\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"An Israel-Hamas war could change what the Fed does about interest rates | iFintechWorld\" \/>\n<meta property=\"og:description\" content=\"The unfolding conflict between Israel and Hamas has financial markets weighing how a war in the Middle East may impact the Federal Reserve\u2019s next policy\" \/>\n<meta property=\"og:url\" content=\"https:\/\/ifintechworld.com\/?p=70797\" \/>\n<meta property=\"og:site_name\" content=\"iFintechWorld\" \/>\n<meta property=\"article:published_time\" content=\"2023-10-10T04:41:24+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-10T04:41:26+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/09\/1693671660_social.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"640\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/ifintechworld.com\/?p=70797#article\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=70797\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\"},\"headline\":\"An Israel-Hamas war could change what the Fed does about interest rates\",\"datePublished\":\"2023-10-10T04:41:24+00:00\",\"dateModified\":\"2023-10-10T04:41:26+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=70797\"},\"wordCount\":642,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"keywords\":[\"Featured\"],\"articleSection\":[\"Markets\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/ifintechworld.com\/?p=70797#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/ifintechworld.com\/?p=70797\",\"url\":\"https:\/\/ifintechworld.com\/?p=70797\",\"name\":\"An Israel-Hamas war could change what the Fed does about interest rates | iFintechWorld\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/#website\"},\"datePublished\":\"2023-10-10T04:41:24+00:00\",\"dateModified\":\"2023-10-10T04:41:26+00:00\",\"description\":\"The unfolding conflict between Israel and Hamas has financial markets weighing how a war in the Middle East may impact the Federal Reserve\u2019s next policy\",\"breadcrumb\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=70797#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/ifintechworld.com\/?p=70797\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/ifintechworld.com\/?p=70797#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/ifintechworld.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"An Israel-Hamas war could change what the Fed does about interest rates\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/ifintechworld.com\/#website\",\"url\":\"https:\/\/ifintechworld.com\/\",\"name\":\"Repay Down\",\"description\":\"Latest Personal Finance News, Tips and Updates\",\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/ifintechworld.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/ifintechworld.com\/#organization\",\"name\":\"Repay Down\",\"url\":\"https:\/\/ifintechworld.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"width\":558,\"height\":90,\"caption\":\"Repay Down\"},\"image\":{\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/ifintechworld.com\"],\"url\":\"https:\/\/ifintechworld.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"An Israel-Hamas war could change what the Fed does about interest rates | iFintechWorld","description":"The unfolding conflict between Israel and Hamas has financial markets weighing how a war in the Middle East may impact the Federal Reserve\u2019s next policy","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/ifintechworld.com\/?p=70797","og_locale":"en_US","og_type":"article","og_title":"An Israel-Hamas war could change what the Fed does about interest rates | iFintechWorld","og_description":"The unfolding conflict between Israel and Hamas has financial markets weighing how a war in the Middle East may impact the Federal Reserve\u2019s next policy","og_url":"https:\/\/ifintechworld.com\/?p=70797","og_site_name":"iFintechWorld","article_published_time":"2023-10-10T04:41:24+00:00","article_modified_time":"2023-10-10T04:41:26+00:00","og_image":[{"width":1280,"height":640,"url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/09\/1693671660_social.jpeg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/ifintechworld.com\/?p=70797#article","isPartOf":{"@id":"https:\/\/ifintechworld.com\/?p=70797"},"author":{"name":"News Room","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61"},"headline":"An Israel-Hamas war could change what the Fed does about interest rates","datePublished":"2023-10-10T04:41:24+00:00","dateModified":"2023-10-10T04:41:26+00:00","mainEntityOfPage":{"@id":"https:\/\/ifintechworld.com\/?p=70797"},"wordCount":642,"commentCount":0,"publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"keywords":["Featured"],"articleSection":["Markets"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/ifintechworld.com\/?p=70797#respond"]}]},{"@type":"WebPage","@id":"https:\/\/ifintechworld.com\/?p=70797","url":"https:\/\/ifintechworld.com\/?p=70797","name":"An Israel-Hamas war could change what the Fed does about interest rates | iFintechWorld","isPartOf":{"@id":"https:\/\/ifintechworld.com\/#website"},"datePublished":"2023-10-10T04:41:24+00:00","dateModified":"2023-10-10T04:41:26+00:00","description":"The unfolding conflict between Israel and Hamas has financial markets weighing how a war in the Middle East may impact the Federal Reserve\u2019s next policy","breadcrumb":{"@id":"https:\/\/ifintechworld.com\/?p=70797#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/ifintechworld.com\/?p=70797"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/ifintechworld.com\/?p=70797#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/ifintechworld.com\/"},{"@type":"ListItem","position":2,"name":"An Israel-Hamas war could change what the Fed does about interest rates"}]},{"@type":"WebSite","@id":"https:\/\/ifintechworld.com\/#website","url":"https:\/\/ifintechworld.com\/","name":"Repay Down","description":"Latest Personal Finance News, Tips and Updates","publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/ifintechworld.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/ifintechworld.com\/#organization","name":"Repay Down","url":"https:\/\/ifintechworld.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","width":558,"height":90,"caption":"Repay Down"},"image":{"@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","caption":"News Room"},"sameAs":["https:\/\/ifintechworld.com"],"url":"https:\/\/ifintechworld.com\/?author=1"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/70797","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=70797"}],"version-history":[{"count":1,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/70797\/revisions"}],"predecessor-version":[{"id":70798,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/70797\/revisions\/70798"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/media\/56152"}],"wp:attachment":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=70797"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=70797"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=70797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}