Fed rate cuts predictions for 2026San Francisco Fed President Mary Daly expressed that an end to the Middle East conflict may alleviate inflationary pressures by reducing energy-price shocks. AdvertisementKey TakeawaysDaly’s remarks suggest that easing Middle East tensions could help lower inflation, potentially influencing Fed policy. Increased technology and AI spending are identified as factors contributing to persistent inflationary pressures. Current market pricing appears consistent with scenarios where inflationary pressures may ease if geopolitical tensions decrease. What to WatchMarkets are closely observing developments in the Middle East, as a resolution could support scenarios favoring eased inflation pressures.