The Iran war exacerbates divisions within the Federal Reserve: Waller adopts a cautious wait-and-see approach, while Bowman insists on three rate cuts this year.

Federal Reserve Governor Waller revealed that he would have again opposed keeping interest rates unchanged this week, but decided to wait and see due to the Iran war; Vice Chair Bowman, however, maintained her expectation of three rate cuts in 2026, remaining optimistic about economic growth. Waller stated on Friday that he was cautious about the impact of soaring oil prices on inflation amid the Iran war, but a weak job market might still prompt him to support rate cuts later this year. Waller, who opposed the Fed's decision to keep interest rates unchanged in January, said he would have voted against it again this week, but the Iran war made him pause that idea. Vice Chair Bowman, who oversees the Fed, stated in an interview with Fox Business Network that she maintains her expectation of three 25-basis-point rate cuts in 2026. Bowman also praised the plan announced this week to ease capital requirements for Wall Street lending giants, potentially freeing up billions of dollars for lending, stock buybacks, and dividend payments. (Jinshi)