Fed and BOE officials keep a cautious stance after a month of escalating tensions in Iran.

Policymakers grapple with whether the war’s impact skews toward higher inflation or stunted growth. Central banks monitor supply chain shocks that could raise commodity prices, yet fear a slowdown in global demand.

Market analysts note that even a brief uptick in oil could lift headline inflation, prompting tighter monetary policy. Conversely, sustained conflict risks dampening investment, squeezing corporate earnings.

With inflation expectations already near the Fed’s 2% target, any shift could force a policy pivot. BOE remains similarly vigilant, wary that a surprise price jump may derail its inflation‑control trajectory.