US Federal Reserve Expected to Hold Interest Rates Steady Amid Inflation Concerns

The US Federal Reserve is set to hold its second meeting under new chairman Kevin Warsh, who was chosen by President Donald Trump. Markets expect policymakers to keep interest rates steady amid inflation concerns.

Warsh has said he wants to reduce or eliminate the amount of forward guidance the Fed provides on its decision-making process. This move has received mixed reactions from analysts, with some arguing that opacity in decision-making creates more uncertainty for markets.

The Fed's dual mandate is to keep inflation at a long-term target while also delivering maximum employment. Its main tool to achieve this is the economy's key interest rate, which tends to curtail economic activity and high prices when raised.

US consumer inflation eased to 3.5 percent year-on-year last month, but remains far higher than the Fed's two-percent target. Some analysts expect a rate hike later this year, citing concerns over high prices and the potential for further rises due to the ongoing war in the Middle East.