Fed Holds Rates Steady Amid Escalating Global Tensions

The Federal Reserve kept interest rates unchanged for a fifth consecutive meeting, signaling its commitment to bringing inflation back to its 2% target. The decision was unanimous among the Fed's policymakers, although three members dissented in favor of a quarter-percentage-point rate increase. This move is seen as a response to ongoing concerns about inflation, which has been elevated in recent months.

Fed Chair Kevin Warsh emphasized that the central bank remains committed to restoring inflation to its 2% target, stating 'There is no soft inflation target.' He also noted that higher interest rates 'could well be part of the solution' if inflation remains elevated during the forecast period. However, he stopped short of signaling an imminent hike.

Meanwhile, President Donald Trump warned Iran would 'get a beating' after an attack on a US military base in Jordan, fueling renewed geopolitical tensions. The conflict has raised concerns over disruptions to energy supplies through the Strait of Hormuz, where shipping activity remains heavily constrained.

The Fed's decision and ongoing geopolitical tensions led to increased demand for safe-haven assets, with gold prices rising by 0.83% to around $4,060.49 an ounce. Oil prices also surged nearly 8%, with Brent crude settling up $6.46 at $90.53 per barrel.