Fed Holds Interest Rates Steady Amid Easing Inflation and Middle East Tensions

The Federal Reserve is expected to keep interest rates unchanged at its July meeting, despite some policymakers projecting at least one rate increase by year-end.

A softening in inflation and easing of Middle East tensions have reduced pressure for tighter monetary policy, according to Hamza Dweik, Head of Trading (MENA), Saxo Bank.

The US annual inflation rate eased to 3.5 percent in June from 4.2 percent in May, helped by lower fuel prices following the US-Iran ceasefire.

Core inflation also slowed, with the core Consumer Price Index declining to 2.6 percent from 2.9 percent.