Uncertainty over tariffs had already led the central bank to adopt a wait-and-see approach to interest-rate decisions.

Oil-watchers are bracing for a further price rally after Israeli strikes on Iranian energy assets heightened the risk to Middle East supplies. Follow live.

Friday's selloff in U.S. government debt, sparked by inflation concerns stemming from the escalating conflict between Israel and Iran, sent Treasury yields up by the most in one week as oil prices surged.

A sustained rise in the price of crude oil, which jumped sharply after Israel attacked Iran, could hurt consumers and President Trump’s efforts to bring down energy costs.

The Federal Reserve is widely expected to hold interest rates steady next week, with investors focused on new central bank projections that will show how much weight policymakers are putting on recent soft data and how much risk they attach to unresolved trade and budget issues and an intensifying conflict in the Middle East.

President Trump has been able to argue that falling energy prices early in his term show his economic policies aren’t stoking inflation, but rapid-fire developments in the Middle East could put that case in jeopardy.