US Treasury warns against rate hikes during US-Iran war energy ‘shock’ | US-Israel war on Iran News
US Treasury Secretary Urges Caution on Interest Rate Hikes Amid Energy Supply Concerns
Published on November 13, 2026
U.S. Treasury Secretary Scott Bessent has urged the Federal Reserve to refrain from increasing interest rates in light of an “energy supply shock” linked to the ongoing conflict with Iran. In an interview with CNBC on Friday, Bessent emphasized the need for the Fed to carefully consider the broader economic landscape.
“I think the Fed should understand that this is an energy supply shock,” Bessent stated, adding that while the U.S. economy remains robust, the central bank should be cautious about making hasty decisions. “To hike too much into an energy supply shock when it’s coming down, these are very noisy numbers. The Fed’s supposed to look into the future, not look in the rearview mirror,” he said.
The Fed maintained interest rates at 3.75 to 4 percent during its latest policy meeting, with the CME FedWatch tool indicating an 89.4 percent probability that rates will increase to a range of 4.00 to 4.25 percent at the next meeting on December 9.
Despite influences from the White House advocating for rate cuts, the Federal Reserve has kept rates steady amidst inflationary pressures resulting from the ongoing U.S.-Israeli conflict in Iran. Since the crisis began, the Fed has made five decisions to keep rates unchanged while implementing one increase.
Rising energy prices have been a major factor driving inflation. As of September, energy costs rose 20.4 percent compared to the previous year. Although recent data has emerged, the Labor Department has been unable to provide a year-over-year comparison for October due to a government shutdown last year.
Bessent’s comments come in conjunction with a robust U.S. jobs report, which indicated the economy added 165,000 jobs in October. “I’m not going to tell the Fed what to do. I am going to say they should have an open mind,” he said, referring to the Fed’s previous actions, which included three rate cuts last year.
Conversely, some Federal Reserve officials are advocating for rate increases. On Tuesday, Fed Governor Christopher Waller expressed support for a quarter-point increase at the upcoming December meeting unless the core consumer price index (CPI) showed a monthly increase of 0.3 percent or higher. Following this statement, the CPI report confirmed a 0.4 percent monthly rise.
Consumers are currently navigating the impact of rising fuel costs. The national average price for a gallon of gasoline is $3.87, a decrease from $4.34 a month earlier, yet still significantly above the February 28 price of $2.98, prior to the escalation of conflict in the region.
