The US Federal Reserve has held interest rates steady at 3.5%-3.75%, amid rising inflation fears triggered by the Iran conflict and a surge in oil prices.
Chair Jerome Powell said it is 'too soon' to assess the full economic impact of the war, warning that recent oil shocks could push inflation higher. The Fed still expects at least one rate cut this year, with five members forecasting rates below 3%.
Inflation forecasts have risen to 2.7% for year-end, up from 2.4% in December, driven by higher gas prices and lingering tariff effects. Economic growth is projected at 2.4%, with unemployment expected to remain at 4.4%.
Powell emphasized the delicate balance between inflation control and labor market stability, citing slowed population growth due to immigration policies as a factor reducing hiring pressure.
His term ends in May, but he will stay on until a successor is confirmed, even if under scrutiny from a DOJ investigation into Fed renovation costs.