Bloomberg Surveillance · Thursday, September 17, 2026
The conflict in Iran and subsequent rise in oil prices, particularly diesel, are seen as significant factors increasing the stakes for the Federal Reserve. Bill Dudley explains that higher oil prices have knock-on effects on transportation costs, potentially filtering into core inflation and complicating the Fed's efforts to reach its 2% inflation target.
“I mean, I think the worst thing of the situation, the war in Iran and the uptick in oil prices, and obviously diesel oil prices in particular, you know, basically raised the stakes for the Fed waiting.”
“As Kevin Warsh talked about, it's really the distribution of prices that increases what we care about. It's really about the pass-through of oil prices into other things.”
“So it's not just going to be, you know, in the headline inflation rate. It's going to start to filter into the core inflation rate as well.”