Governor Christopher Waller says he's cautious about the need to lower interest rates in the near term because of the energy shock triggered by the war in Iran.

He warned of the risk of a prolonged impact on inflation because of the conflict.

The inflation, the risk is that the longer the conflict drags on and energy prices remain high, the more likely it is that these elevated prices will start to bleed into other prices.

This will start affecting firms, input costs, which then get passed along to consumers.