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Fed holds benchmark rate flat as Iran conflict clouds inflation fight

The FOMC voted 9 to 3 to keep rates unchanged, with three members backing a quarter-point hike, while oil prices tied to the Iran conflict continue to pressure costs.

Reported · Written up by our desk · Central Banks

The Federal Reserve left its benchmark interest rate unchanged for the second time in as many meetings, according to Bisnow, extending a stretch in which the central bank has not adjusted rates for the fifth consecutive meeting.

Bisnow reports that members of the Federal Open Market Committee voted 9 to 3 to hold rates steady, while Beth Hammack, Neel Kashkari and Lorie Logan supported a quarter-point rate hike. Fed Chairman Kevin Warsh said the committee had a “healthy debate” on major questions for monetary policy and stressed that delivering stable prices remains central to the Fed’s responsibilities.

Markets broadly expected the decision, with futures pricing indicating two-thirds odds of no change and one-third odds of a rate hike, according to CME Group’s FedWatch tool cited by Bisnow. The article links the outcome to persistent inflation pressures and uncertainty around the jobs market affecting the Fed’s dual mandate.

Bisnow also notes that the ongoing conflict in Iran continues to weigh on the global economy, with its impact on crude oil prices raising transportation and production costs and slowing consumer spending, factors that help explain why the Fed chose to remain patient rather than move rates.

Latest closeWTI crude $81.23 ▼1.7%

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