US Fed keeps interest rates steady amid economic, geopolitical uncertainty

"The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The implications of developments in the Middle East for the US economy are uncertain, the central bank said in a statement announcing its policy decision and referring to its Federal Open Market Committee."

"Wholesale prices are running hot as service prices surge, and now, Trump's war in Iran is rocking commodity markets around the globe, Elizabeth Pancotti, managing director of policy and advocacy at Groundwork Collaborative, an economic think tank, said in comments provided to Al Jazeera."

"Despite meaningful progress on inflation in 2024, Trump's tariffs have stalled progress and kept inflation persistently above the Fed's target. Consumers are also facing the repercussions of US President Donald Trump's trade and military policies in their daily expenses."

The Federal Reserve held its benchmark interest rate steady at 3.5-3.75 percent, consistent with its previous decision. This decision reflects a cooling labor market and persistent inflation concerns following US and Israel strikes on Iran. The central bank acknowledges elevated uncertainty about the economic outlook and the unclear implications of Middle East developments for the US economy. The Fed remains committed to achieving maximum employment and 2 percent inflation over the longer term. This rate hold follows three rate cuts in 2025. Consumers face mounting pressures from Trump administration trade and military policies, with tariffs stalling inflation progress and keeping prices above the Fed's target. Wholesale prices remain elevated as service costs surge and commodity markets experience volatility from geopolitical tensions.

Read at www.aljazeera.com