Fed Set to Hold Rates as Inflation Fears Mount Amid Iran War

The US Federal Reserve is set to hold its second meeting under new chairman Kevin Warsh, starting on July 26. Markets expect policymakers to keep interest rates steady at 3.50-3.75 per cent for the fifth straight meeting.

The decision comes as inflation concerns persist, with consumer prices easing to 3.5 per cent year-on-year last month but remaining above the Fed's long-term target of 2 per cent.

Energy prices have surged due to escalating tensions between the US and Iran, which has breached $100 per barrel for the first time since late May.

Fed Governor Chris Waller warned that policymakers need to be prepared to tighten monetary policy to prevent a repeat of the 2021-2022 inflation episode.