Fed Holds Rates Steady Amid Inflation Fears and Middle East Uncertainty

The Federal Reserve has left its key interest rate unchanged for now, despite persistently high inflation and a spike in energy prices caused by the Iran war.

The Fed's rate-setting committee reached a 9-3 decision after two days of deliberations, marking the fifth straight meeting at which the benchmark rate was kept at around 3.6%.

Dissenting in favor of a quarter-point interest rate hike were Beth Hammack, president of the Federal Reserve Bank of Cleveland; Neel Kashkari, president of the Minneapolis Fed; and Lorie Logan, president of the Dallas Fed.

Inflation has been stuck above the central bank's 2% target for more than five years. The Iran war has generated uncertainty over the economic outlook and has driven energy prices higher, intensifying inflationary pressure and creating a quandary for Fed policymakers.