‘If we were ever to skip an SEP, this is a good one’ – Fed Chair Powell sees heightened uncertainty amid Iran war impacts

Fed Chair Powell struck a cautious tone after the FOMC held rates unchanged, flagging “heightened uncertainty” around the Iran war and warning that a prolonged oil-price shock would be “downward pressure on spending and employment and upward pressure on inflation.” He stressed that the economic pass-through from higher gasoline prices is highly uncertain and could be “smaller or much bigger,” making near-term projections less reliable than usual. On the dots/SEP, Powell noted a meaningful hawkish tilt beneath an unchanged median for 2026: “four or five people went from two to one” cuts, indicating some officials are leaning toward fewer reductions even if the central tendency didn’t move. Powell also underscored how little conviction policymakers have about forecasts in the current environment, saying, “If we were ever to skip an SEP, this is a good one,” because “we just don’t know.” For precious metals, the takeaway is a potentially supportive mix of geopolitical risk and oil-driven inflation risk versus a policy backdrop that may stay restrictive if inflation risks re-accelerate (a headwind for non-yielding gold via real rates if the market reprices fewer cuts). Near-term catalysts for gold/silver pricing will be any escalation/de-escalation in the Middle East that drives energy prices, plus follow-through in front-end rate expectations as the market digests the internal hawkish drift in the 2026 dots. Separately, Powell said if his successor is not confirmed by the end of his term as chair, he would serve as chair pro tem until confirmed; he also said he has “no intention of leaving the board” while a Justice Department investigation is ongoing.