USD: Fed patience and Iran risks shape outlook – TD Securities

FXStreetApr 13, 2026 1:25 PM

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TD Securities strategists Oscar Munoz and Eli Nir argue that US macro dynamics and Federal Reserve (Fed) policy expectations will be driven by developments in Iran, recent inflation data and incoming activity indicators. They expect the Fed to stay on hold until September 2026, with only gradual easing thereafter, as stagflationary risks from higher Oil prices and geopolitical uncertainty keep policy restrictive.

Fed on hold as stagflation risks build

"We expect the Fed will remain patient amid volatility in developments with Iran."

"We expect the Fed to remain on hold until September as they assess the developments in Iran and its impact on the economy."

"By then, inflation progress will have likely resumed, allowing for the Fed to continue its gradual move towards neutral."

"The onus will be on the data to force the Fed's hand."

"We look for 50bps total of easing this year in September and December with an additional 25bps cut in March 2027, ending with a Fed funds rate at 3.00%."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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