Fed Holds Rates Steady Amid Ongoing Inflation Concerns

The US Federal Reserve is preparing for its second meeting under new Chairman Kevin Warsh, which starts on Tuesday. Markets expect policymakers to keep interest rates steady at 3.50-3.75 percent amid inflation concerns that could be exacerbated by the ongoing tensions between the US and Iran.

US consumer inflation eased to 3.5% year-on-year last month, but remains far higher than the Fed's long-term two-percent target, which it has not achieved for more than five years.

Policymakers have been losing patience with persistent inflation, indicating that a rate hike may be near. 'The Fed has to be ready to tighten monetary policy to prevent a repeat of the 2021-to-2022 inflation episode,' said Fed Governor Chris Waller last week.