Washington, United States — The Federal Reserve held its benchmark interest rate steady at 3.5% to 3.75% and signaled it still expects to lower borrowing costs later this year, while Chair Jerome Powell cautioned it is “too soon” to know how the Iran war and the resulting energy-price shocks will affect the U.S. economic outlook, according to CNBC, CNBC, BBC News, BBC News, AP News, and The Guardian. Each of the bullet points immediately below have been confirmed by at least four of the six respected sources we curated on this story.
- The Fed kept its benchmark federal funds rate unchanged in a target range of 3.5% to 3.75%.
- Policymakers indicated they still anticipate at least one interest-rate cut later this year.
- Powell said it is too soon to know the scope and duration of the Iran war’s effects on the U.S. economy and inflation outlook.
Additional Details Reported
Several outlets reported that the decision was not unanimous. CNBC, AP News, and The Guardian said Fed governor Stephen Miran dissented in favor of a quarter-point rate cut.
Markets and inflation pressures
BBC News and CNBC reported that Fed officials forecast economic growth of about 2.4% this year, while BBC News, CNBC, and AP News said policymakers now see inflation ending the year around 2.7%.
The Guardian reported that U.S. stocks fell sharply after the Fed’s announcement, and that Powell acknowledged higher energy prices could push inflation higher in the near term. AP News also cited a recent jump in gasoline prices to a nationwide average of $3.84 a gallon, up 92 cents from a month earlier.
Energy shock adds uncertainty
In the energy markets, BBC News and CNBC reported oil prices traded above $110 a barrel after attacks linked to the Iran conflict hit energy infrastructure, including reported damage at Qatar’s Ras Laffan industrial site. BBC News said the White House suspended the Jones Act for 60 days to help vital resources such as oil and natural gas move more freely.
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