Iron Lady, it's felt (6)
I believe the answer is:
fedora
'it's felt' is the definition.
(hat made of felt)
'iron lady' is the wordplay.
'iron' becomes 'fe' ('Fe' can be a synonym of 'iron').
'lady' becomes 'dora' (**).
'fe'+'dora'='FEDORA'
(Other definitions for fedora that I've seen before include "Felt hat with a creased crown" , "Soft felt hat with a curled brim" , "Felt hat much loved by 1930s gangsters" , "Headwear" , "Read of (anag) - brimmed felt hat" .)