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Central Banks Face Tough Choices Amid Rising Oil Prices

3/17/2026

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Summary

Story summary

The Federal Reserve (the U.S. central bank), the European Central Bank, the Bank of Japan, and the Bank of England prepare for meetings as oil prices rise amid the Iran war.
Economists expect the Federal Reserve to hold its policy rate at 3.5%–3.75% at its March 18, 2025 meeting, with no cuts in 2026.
The Federal Reserve's dual mandate complicates decisions as inflation pressures mount, potentially shaping the policy path.

History

Historical Context

In 1977, the U.S. Congress amended the Federal Reserve Act to establish a dual mandate for the Federal Reserve, focusing on maximum employment and stable prices. This followed a period of stagflation in the 1970s, marked by rising inflation and unemployment. Today, as global oil prices rise amid geopolitical tensions, the Fed and other central banks face renewed challenges in balancing these economic goals.

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Story summary

The Federal Reserve (the U.S. central bank), the European Central Bank, the Bank of Japan, and the Bank of England prepare for meetings as oil prices rise amid the Iran war.
Economists expect the Federal Reserve to hold its policy rate at 3.5%–3.75% at its March 18, 2025 meeting, with no cuts in 2026.
The Federal Reserve's dual mandate complicates decisions as inflation pressures mount, potentially shaping the policy path.

1 / 2