US Fed defies Trump to keep interest rates unchanged amid Iran war concerns

2026.03.18 19:20 Federal Reserve Chair Jerome Powell speaks during a news conference in Washington on Wednesday. Photo: AP The US Federal Reserve kept interest rates unchanged on Wednesday as expected, in defiance of President Donald Trump as the world’s largest economy battles stubborn inflation, weak labour demand and an “uncertain” outlook due to the war in Iran. The Fed’s 11-1 vote kept rates steady at a range between 3.50 per cent and 3.75 per cent, with officials flagging one expected rate cut by the end of the year. “The implications of developments in the Middle East for the US economy are uncertain,” the Fed said in a statement. The bank cut rates three consecutive times late last year before holding them steady at its January meeting. It has a dual mandate of maintaining inflation near a long-term target of 2 per cent while ensuring maximum employment. With US-Israel war on Iran causing global oil prices to spike, potentially fuelling inflation and curbing growth, analysts say policymakers were always unlikely to make any immediate moves. A trader works on the floor of the New York Stock Exchange on Wednesday. Photo: AFP Affordability has been a key political issue for Trump, who has repeatedly called for rates to be slashed even as prices have remained stubbornly high. “Uncertainty about the economic outlook remains elevated,” the Fed said on Wednesday, while noting that economic activity was “expanding at a solid pace”. “Job gains have remained low, and the unemployment rate has been little changed in recent months. Inflation remains somewhat elevated.” The US central bank also released its quarterly summary of economic projections, expecting year-end fourth-quarter GDP growth to come in at 2.4 per cent year-on-year. The Fed raised its inflation outlook as well, expecting PCE (personal consumption expenditures) inflation at year end to come in at 2.7 per cent, up from an earlier estimate of 2.4 per cent. The knock-on effects of the war, particularly of o

原文链接: 南华早报