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WASHINGTON — <\/span>The jump in gas prices<\/a> stemming from the war in Iran has had another impact that may also affect many Americans’ finances: Higher interest rates. <\/p>\n Longer-term interest rates have risen quickly since the war began Feb. 28, pushing up the cost of mortgage loans<\/a>, auto loans, and business borrowing. And with inflation measures likely to rise in the coming months, the prospect of interest rate cuts this year by the Federal Reserve is fading<\/a>. Wall Street investors instead see the odds rising of an actual rate hike instead. <\/p>\n The fact that a rate hike has become a plausible scenario \u2014 even as most economists still see it as unlikely \u2014 represents a sharp turnaround from early this year, when the debate was more focused on how many times<\/a> the Fed would reduce its key rate, rather than whether it would do so at all. <\/p>\n \u201cWe think cuts are delayed, not derailed,\u201d Krishna Guha, head of economics at Evercore ISI, an investment bank, wrote Tuesday. \u201cThe question is, delayed to September, delayed to December, or delayed more indefinitely\u201d into 2027? <\/p>\n Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said in an interview with The Associated Press Monday that if inflation were to rise while the unemployment rate remained stable, and Americans showed signs of anticipating higher inflation in the future, “then there is an obvious playbook, which is rate increases have to be on the table.\u201d Goolsbee participates in meetings of the Fed’s rate-setting committee, but is not one of the 12 voters this year. <\/p>\n Wall Street investors no longer foresee any rate reductions this year, according to futures pricing tracked by CME Fedwatch. And the odds of a rate hike by October have risen to nearly 25%, up from zero just a week ago. <\/p>\n Late Monday, Mary Daly, president of the San Francisco Fed, said in a written statement<\/a> that the uncertainty created by the Iran war means \u201cthere is no single most-likely path\u201d for the Fed’s key interest rate, suggesting the Fed could move up, down, or stay unchanged in the months ahead. <\/p>\n The war has created a tricky dilemma for the Fed. Most economists expect that the conflict could worsen inflation by lifting gas prices. But when gas prices rise very high \u2014 say $5 a gallon for an extended period \u2014 they could force consumers to cut back on spending elsewhere to offset the higher gas costs, slowing the economy and potentially pushing up unemployment. <\/p>\n \u201cOn net more inflation means probably higher rates,\u201d said Jonathan Pingle, an economist at UBS. \u201cOn the other hand, that energy price shock is going to be a headwind to growth.\u201d<\/p>\n The Fed typically raises rates \u2014 or keeps them unchanged \u2014 to combat inflation, while they often cut rates to spur the economy and lower unemployment. <\/p>\n When gas prices spike, the standard response for a central bank is to look past the increase in inflation that results because it is often a temporary phenomenon. In that case, the Fed could even cut rates if it began to worry that unemployment was worsening. <\/p>\n