Powell Says Fed Can Look Past Oil Shock, but Warns Patience Has Limits

March 31, 2026

Federal Reserve Chair Jerome Powell said Monday the central bank is inclined to hold rates steady and look past the energy shock from the war in Iran but cautioned that it might not be able to sit on the sidelines if rising prices shift the public’s expectations about inflation over time. 

Powell, speaking to students at Harvard University, laid out the textbook case for patience: Energy disruptions tend to be short-lived, and monetary policy works too slowly to counteract them in real time. He added a critical caveat, however, by noting how five years of above-target inflation made it harder to assume the public would simply shrug off another round of rising prices.

Read more.