Fed Holds Rates Amid Iran War, Inflation, Oil Surge; Markets React

The Federal Reserve held interest rates steady at 3.5%-3.75% for the second consecutive meeting.

“The reference rates, set by the Federal Reserve, therefore remain at the level they have had since December, between 3”

Banca y Negocios

Only one member dissented, voting to cut.

Banca y Negocios

The Fed's statement acknowledged uncertainty about the economic outlook and referenced the Middle East conflict.

Inflation was forecast at 2.7% in 2026, higher than the previous 2.4%.

US stocks tumbled, with the Dow falling over 1.6%.

Hotter-than-expected wholesale inflation amplified the market reaction.

PGurus

Yields on the 10-year Treasury climbed throughout Powell's press conference.

The Fed acknowledged the war raised more questions about monetary policy.

“Dow falls 700 pts as Fed holds rates, hot PPI fuels inflation fears”

Invezz

Brent crude briefly crossed $110 per barrel.

Powell emphasized it was too early to determine the magnitude of the conflict's economic effects.

The Fed's dot plot revealed deep divisions among policymakers.

Seven officials penciled in a quarter-point cut.

The Guardian

Seven projected no policy adjustments at all.