Trump: Fed rate cuts may wait until Iran conflict ends

## Market Snapshot

Fed rate cuts for 2026 are priced at 68.5% YES for no cuts, down from 70% a day ago. The possibility of a rate cut in June or July is priced at less than 1% YES.

## Key Takeaways

– Trump’s statement suggests a delay in interest rate cuts until the Iran war ends, affecting market pricing. – The current market pricing is consistent with a low likelihood of rate cuts in 2026. – The ongoing conflict between the U.S., Israel, and Iran continues to influence Federal Reserve policy expectations.

## Article Body

Former President Donald Trump has indicated that the Federal Reserve may postpone interest rate cuts until the conclusion of the ongoing conflict involving the U.S., Israel, and Iran. This statement comes as the military engagements, which began with joint U.S. and Israeli strikes on Iranian targets, continue with no definitive end in sight. The protracted conflict has expanded into a broader regional war, escalating tensions and economic uncertainties. Trump’s remarks highlight the potential for extended geopolitical instability to impact domestic monetary policy, specifically the timing and likelihood of interest rate adjustments by the Federal Reserve.

## Market Interpretation

The market’s response to Trump’s statement appears consistent with a scenario where interest rate cuts in 2026 are less likely. This is reflected in the current YES pricing for no cuts in 2026 at 68.5%, a slight decrease from the previous day. The impact is categorized as moderate, with the ongoing conflict adding uncertainty to the Federal Reserve’s future policy decisions.

## What to Watch

Key developments to monitor include any diplomatic efforts or military resolutions that could alter the current conflict dynamics. Additionally, statements or policy indications from Federal Reserve Chair Jerome Powell and other members could provide further insights into potential shifts in monetary policy. The next Federal Open Market Committee (FOMC) meetings in June and July will be critical in shaping expectations about rate decisions.

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