Fed holds US interest rates steady as Trump Iran deal uncertainty hangs over markets
The Federal Reserve held its benchmark rate at 4.25–4.50 percent at Chairman Kevin Warsh's first meeting and revised inflation forecasts higher. A significant bloc of policymakers signalled one more rate increase before year-end, citing uncertainty over the oil-price path after the Trump-Iran framework. Treasury yields rose and the dollar firmed after the decision.
The Federal Open Market Committee left the policy rate unchanged at its Wednesday meeting. According to the statement carried by the BBC, the Committee said economic activity continued to expand at a moderate pace while inflation remained above target. At his first press conference, Warsh declined to publish his own rate projection.
The updated dot plot showed the median member pencilling in one additional 25-basis-point hike before year-end. CNBC analysis described the projections as pushing markets toward a more hawkish Fed scenario. The path of Brent crude after the Trump-Iran framework was highlighted as a critical variable for upcoming decisions.
The two-year Treasury yield rose after the decision and US equity indices closed lower. Investors turned their attention to internal Fed reforms Warsh is expected to outline in coming weeks and to the effect of the Iran framework on global oil supply.
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