Investors are focusing on Federal Reserve Chair Jerome Powell this week for insights into how the central bank is weighing a range of economic risks as the US and Israel conduct joint strikes against Iran.

Markets anticipate that Fed officials will maintain the benchmark interest rate unchanged in the 3.5%-3.75% range for the second consecutive meeting. However, policymakers are likely engaged in intense debate over how the Middle East conflict could pressure both aspects of their dual mandate, and whether addressing the threat of slowing economic growth might exacerbate inflation—which has now been above the Fed's target for five consecutive years.

"Whenever the Fed's dual mandate becomes conflicting mandates, there should be a debate," stated Diane Swonk, chief economist at KPMG. "The reality is, we don't have the same leeway as other central banks to look the other way on inflation, because five years in, the risk of inflation becoming more entrenched grows by the day."

Fed officials will release a post-meeting statement at 2 p.m. local time on Wednesday in Washington. Powell will hold a press conference 30 minutes later.

**Updated Forecasts**

Policymakers will release updated economic projections, potentially revealing how they interpret recent economic data and geopolitical events. Economists surveyed by Bloomberg expect the Fed to project two 25-basis-point rate cuts this year, up from the single cut forecast by policymakers in December.

Data released after the Fed's January meeting showed that inflation remained elevated even before the Middle East conflict triggered a surge in oil prices. Labor market news has been mixed: a strong January report was followed by an unexpected sharp drop in February nonfarm payrolls.

Officials' projections for inflation, GDP, and unemployment may offer clues as to how they expect the oil price shock to affect the economy over the longer term.

**Policy Statement**

The Federal Open Market Committee (FOMC) is likely to reference the Iran conflict in its post-meeting statement, signaling that it has heightened uncertainty in both the geopolitical landscape and the U.S. economy. Officials may also need to update their description of the labor market to reflect recent employment volatility. Additionally, Fed watchers will be keen to see how they characterize inflation following the recent rise in energy prices.

**Press Conference**

Powell is expected to emphasize that officials need more time to gauge how long the conflict with Iran will last and assess its potential impact on growth and inflation. He may also highlight the current high level of uncertainty and the Fed's need to keep all options open.

Reporters may also question Powell on whether he intends to remain at the Fed after his term as chair ends in May. Former Fed Governor Kevin Warsh has been nominated for the position, but his Senate confirmation has been blocked by Republican Senator Thom Tillis of North Carolina, who has vowed to halt the confirmation process pending the outcome of an investigation.