A key question hangs over the Federal Reserve’s two-day meeting that ends Wednesday: Will central bank policymakers still reduce short-term interest rates this year, now that the Iran war has sent oil prices higher and gas prices spiking?

Federal Reserve officials expect the Iran war will worsen inflation this year while having little impact on economic growth, but they still expect to cut their key rate once in 2026.

Markets are pricing in a near-zero chance that the Federal Reserve will be cutting interest rates at this meeting — or any other in the near future.

Stocks sold off on Wednesday after new U.S. economic data as well as comments from the Federal Reserve chief stoked concerns about persistent inflation in the country.