The Israeli economy is facing a significant hit to growth projections as a result of the Middle East conflict — but its central bank chief is hopeful that a rapid resolution to the wars in Lebanon and Iran can help ease the shock.

Speaking with CNBC’s Karen Tso at the IMF-World Bank spring meeting in Washington, D.C. on Thursday, Amir Yaron, governor of the Bank of Israel, acknowledged there is still “huge uncertainty” around the duration of the conflict, despite recent signals that a resolution could be in sight.

Israel and Lebanon agreed an immediate 10-day ceasefire Thursday following talks in Washington between officials from both countries.

Israel has slashed its growth expectations for 2026 from 5.2% to 3.8% as a result of the hostilities in the Middle East.

But Yaron — who was speaking shortly before U.S. President Donald Trump announced the temporary truce on Thursday — believes growth can rebound to 5.5% in 2027, should those conflicts be resolved.

“It’s a working assumption,” Yaron said.  

A de-escalation in hostilities would ease geopolitical risk in Israel, along with the Gulf states, and help to boost growth. But Yaron also acknowledged the possibility of a much more prolonged conflict, which he said would weigh on growth and inflation expectations.

“Markets, both aboard and in particular in Israel, are taking the view that the geopolitical situation has improved a lot already,” he explained, pointing to the strength in Israel’s stock market, the shekel’s rally, and five-year credit default swaps returning to pre-campaign levels.

By contrast, any escalation of the conflict “would obviously detract more growth from the current forecast.” Yaron added.

Oil prices fell on Friday morning following the Israel-Lebanon ceasefire agreement, as Trump repeated his assertion that an end to the war in Iran is in sight.

An expected nomination hearing for Federal Reserve chair candidate Kevin Warsh has been delayed, a person familiar with the matter told CNBC on Thursday evening.

Warsh had been set to appear before the Senate Banking Committee on April 16. That won’t happen, but the hearing is still expected soon, the person said, requesting anonymity as the details have not been made public by the committee.

The committee’s rules require that it give a week’s notice before the hearing is held, and the panel first needs to collect paperwork from the nominee, including financial disclosures. The Banking Committee has yet to receive Warsh’s paperwork, according to three people familiar with the Senate process.

The committee has not formally noticed the hearing. The deadline for doing so was Thursday. Punchbowl earlier reported the delay to Warsh’s hearing.

Warsh’s finances may be especially complicated. He is married to Estée Lauder cosmetics heir Jane Lauder, whose net worth is estimated at $1.9 billion, according to Forbes. 

Financial disclosures filed in 2006, when Warsh was nominated for an earlier stint at the Fed, listed nearly 1,200 assets, the vast majority of which were held by his wife.

Since leaving the Fed in 2011, Warsh has spent 15 years working for investor Stanley Druckenmiller’s family office, where he led venture investments into tech firms, including Palantir.

President Donald Trump in January announced Warsh’s nomination to succeed Chair Jerome Powell, whose term as the Fed’s top official expires May 15. 

National Economic Council Director Kevin Hassett told Fox Business in an interview on Thursday that he is “highly confident” that Warsh will be in place by the end of Powell’s term as chair. 

While the Trump administration appears confident about Warsh’s confirmation, it will be difficult for him to advance beyond a hearing unless Sen. Thom Tillis, R-N.C., drops a blockade of the nomination.

Tillis is refusing to vote for any Fed nominee until the Department of Justice drops a criminal probe into Powell. Tillis and Powell have called that investigation a politically motivated effort to undermine the Fed’s independence. 

U.S. Attorney for the District of Columbia Jeanine Pirro told CNBC on Wednesday that she plans to move forward with the investigation. That leaves Warsh’s path beyond the hearing unclear.

Federal Reserve Chair Jerome Powell, in a wide-ranging talk at Harvard University, said Monday that he sees inflation expectations as grounded despite rising energy prices so the central bank doesn’t need to respond with higher interest rates.

As his term leading the central bank nears an end, Powell avoided questions about the longer-term direction of interest rates or inclinations his designated successor has espoused.

In the near term, he said the proper move is to look beyond the short-term gyrations of the energy market and focus on the Fed’s goals of stable prices and low unemployment.

“Inflation expectations do appear to be well anchored beyond the short term, but nonetheless, it’s something we will eventually maybe face the question of what to do here,” he said during a question-and-answer question with a moderator and students. “We’re not really facing it yet, because we don’t know what the economic effects will be, but we’ll certainly be mindful of that broader context when we make that decision.”

As he has in the past, Powell said he believes the current rate target, in a range between 3.5%-3.75%, is “a good place” for the Fed to sit as it observes events currently playing out, including the Iran war and the impact tariffs are having on prices.

The comments appeared to register in financial markets, with traders no longer pricing in a significant chance of a rate hike this year. As recently as Friday morning, markets were looking at a better than 50% probability of a quarter percentage point increase amid expectations the Fed would react to the surge in energy costs. However, odds of a hike by December fell to 2.2% after Powell’s appearance.

Powell said raising rates now could have negative effects on the economy later. He noted that Fed rate moves have a lagged impact on the economy, so tightening here wouldn’t help the inflationary impact of the Iran war.

“By the time the effects of a tightening in monetary policy take effect, the oil price shock is probably long gone, and you’re weighing on the economy at a time when it’s not appropriate. So the tendency is to look through any kind of a supply shock,” he added.

Market-based measures such as breakeven rates in Treasury yields indicate few fears of an inflation spike. Breakevens measure the difference between Treasurys inflation-indexed securities. The five-year breakeven rate most recently was around 2.56% and trending lower over the past 10 days.

Powell’s term ends in mid-May, and President Donald Trump has nominated former Governor Kevin Warsh as the next chair. However, Warsh’s nomination is being held up in the Senate Banking Committee as U.S. Attorney Jeanine Pirro continues her investigation into renovations at Fed headquarters.

Though a judge threw out a subpoena Pirro’s office issued to Powell, she has appealed the decision. While the case is being adjudicated, Sen. Thom Tillis, R-N.C., has vowed to prevent the nomination from going through.

For his part, Warsh has stated a preference for lower interest rates than the current level. Asked to comment on his successor’s plans, Powell said, “I’m not going to swing at that pitch.”

Regarding private credit, Powell noted rising defaults, investor withdrawals and concerns about wider issues in the $3 trillion sector.

“I’m reluctant to say anything that suggests that we’re dismissive of the risk, but we’re looking for connections to the banking system and things that might result in contagion. We don’t see those right now,” he said. “What we see is a correction going on, and certainly there’ll be people losing money and things like that. But it doesn’t seem to have the makings of a broader systemic event.”

American consumers and businesses are taking most of the hit from President Donald Trump’s tariffs, New York Federal Reserve President John Williams said Tuesday in remarks that counter White House claims.

“The tariffs have overwhelmingly been borne domestically — a New York Fed analysis estimates that most of the burden has fallen on U.S. firms and consumers.,” Williams said in remarks for a conference in Washington, D.C. “In addition, the tariffs have already meaningfully increased U.S. prices of imported goods, and the full effects have likely not yet been felt.”

The study Williams cited has generated a fair amount of controversy over the past few weeks.

In a white paper published on the New York Fed’s website, a team of researchers found that as much as 90% of the added cost from tariffs has been passed on to domestic producers and consumers. Trump and other White House officials had insisted that exporters would absorb the costs rather than raise prices.

National Economic Council Director Kevin Hassett flamed the controversy during a CNBC appearance in which he suggested that the researchers should be “disciplined” for what he termed was “the worst paper I’ve ever seen in the history of the Federal Reserve system.” Hassett later stepped back the criticism.

Addressing the issue for the first time publicly, Williams said not only were the tariffs being felt at home, but they also were keeping the Fed from reaching its 2% inflation goal.

“My current estimate is that, to date, the increase in tariffs has contributed around one half to three quarters of a percentage point to the current inflation rate of about 3 percent,” he said. “The FOMC defines price stability as 2 percent inflation over the longer run. Owing to the effects of tariffs, progress toward that goal has temporarily stalled.”

On the bright side, Williams said he still expects the tariff impact on inflation to be temporary, and he sees the Fed hitting its target by 2027. He added that the U.S. economy “appears to be on a good footing.”

As for current policy, he said it is “well positioned” for the Fed to hit its dual mandate goal of steady prices and full employment. Should inflation progress lower after the tariff impact fades, “further reductions in the federal funds rate will eventually be warranted to prevent monetary policy from inadvertently becoming more restrictive.”

Markets expect the Fed to resume cutting later this year, possibly in July or September, according to current futures pricing. As New York Fed president, Williams carries extra influence on the Federal Open Market Committee, where he is a permanent voting member.