3 reasons the Federal Reserve's interest rate pause is worrying investors
CBSN
The fog from the Iran war is obscuring the Federal Reserve's view of the U.S. economy. Edited by Alain Sherter In:
The fog from the Iran war is obscuring the Federal Reserve's view of the U.S. economy.
Investors were rattled on Wednesday, when the central bank said it is holding interest rates steady, after Fed Chair Jerome Powell repeatedly underlined the mounting uncertainty caused by the escalating Middle East violence. Stocks slumped during his afternoon press conference, and have continued to drop on Thursday.
"The Fed is frozen," Heather Long, chief economist at Navy Federal Credit Union, told CBS News. "We're in this world where clearly the risks are elevated to the extreme, and the No. 1 question for the economy is when does the Strait of Hormuz reopen — and that isn't really an economic question."
About 20% of the world's oil supply travels through the Strait of Hormuz in the Persian Gulf, which has been effectively paralyzed by the Iran war.
Here are three reasons the Fed's latest economic outlook is causing investors to fret.
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