Fed Holds Firm as Inflation Eases and Middle East Tensions Abate

The Federal Reserve is expected to keep interest rates unchanged this week as softer-than-expected inflation data and renewed easing in U.S.-Iran tensions reduce pressure for tighter monetary policy.

Ahead of its July 28-29 policy meeting, the central bank has kept its benchmark interest rate at 3.50 percent to 3.75 percent since December.

Inflation has moderated compared with earlier in the year, but the recent rebound in oil prices and ongoing Middle East tensions mean policymakers are unlikely to signal any near-term easing.