Fed Holds Key Meeting Amid Iran Inflation Fears

The US Federal Reserve's key rate-setting committee has begun its two-day meeting, with policymakers expected to keep interest rates steady amid growing concerns over inflation triggered by the ongoing conflict between Iran and the US.

The Fed's Open Market Committee (FOMC) will announce its decision at 2:00 pm local time on Wednesday, followed by a press conference from Fed Chair Kevin Warsh.

Warsh has emphasized the Fed's commitment to delivering price stability, with several policymakers echoing his sentiments and highlighting the need to address surging inflation. The Fed's dual mandate is to keep inflation at its long-term target of 2% while ensuring maximum employment in the world's largest economy.

With the US unemployment rate relatively stable at around 4.2%, Fed policymakers have made it clear that their focus is on inflation. Markets have priced in a possibility of a rate hike, with investors giving a more than 30% probability that it could come as soon as Wednesday, according to CME's FedWatch tool.