Markets
March 13, 2026
President Donald Trump is again pushing the Federal Reserve to slash borrowing costs, even as the markets are moving in the opposite direction. In a post on Truth Social this week, Trump urged Fed Chair Jerome Powell to lower borrowing costs immediately instead of waiting for the Federal Open Market Committee meeting scheduled next week.
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When US and Israeli strikes on Iran began on February 28, traders still expected the Federal Reserve to lower borrowing costs more than once this year. That expectation shrank quickly. Interest rate futures now signal only one potential rate cut in 2025. This is because investors are looking at inflation risks that are tied to rising energy prices.
Oil markets have been driving much of this shift. After Iran’s new Supreme Leader, Mojtaba Khamenei, vowed to keep the Strait of Hormuz closed, crude surged. West Texas Intermediate crude was seen settling near $95.70 a barrel. This is because nearly one-fifth of the world’s oil supply moves through the waterway. Any disruptions in the region tend to ripple quickly through fuel, transport, and food prices. This tension sits at the center of the Trump Fed rate cuts and the Iran debate as it is now shaping across markets.
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Goldman Sachs Pushes Rate Cut Forecast to September as PCE Inflation Heads to 2.9%
Wall Street analysts can already be seen adjusting their forecasts. This week, Goldman Sachs said that it expects the first Fed rate cut in 2026 to arrive in September rather than June. They cited stronger inflation pressures linked partly to energy costs. Goldman Sachs also lifted its PCE forecast and projected the Fed’s preferred inflation measure to reach 2.9% by the end of the year. This is still well above the central bank’s 2% target.
In addition, rising oil prices are already raising inflation concerns. On X, Adam Kobeissi noted that every $10 increase in prices can add 20 basis points to inflation.
The timing matters because the Fed rarely moves outside scheduled policy meetings. The last intermeeting rate cut took place back in March 2020. This is when the central bank rushed to stabilize markets during the early days of the pandemic.
A slew of investors are discussing monetary policy. But several Americans are already feeling the strain of rising costs. A West Health-Gallup survey found nearly 82 million Americans say they have had to cut spending, skip meals, or borrow money to pay medical bills. About 15% are reportedly taken on debt for healthcare costs in the past year. This shows how US inflation has impacted healthcare expenses.
The broader picture is uncomfortable for policymakers. The Iran war and inflation shock are pushing energy prices higher. At the same time, political pressure for rate cuts is intensifying.
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