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Fed Keeps Rates Unchanged as Middle East Tensions Unsettle Investors

The central bank projects two rate cuts this year after trimming growth forecasts, reflecting investor concern over a sliding dollar, energy price gains, geopolitical instability

La Banque d’Angleterre, le 2 novembre 2022 à Londres
Traders sur le parquet du New York Stock Exchange le 16 juin 2025.
Un opérateur à la Bourse de New York le 18 juin 2025.
La Fed n’a pas abaissé ses taux ce mercredi 18 juin.

Overview

  • The Federal Reserve held its benchmark rate at 4.25%–4.50% for the fourth consecutive meeting, maintaining its cautious policy stance.
  • Officials cut the 2025 GDP growth forecast to 1.4% and raised their inflation outlook to 3%, signaling persistent price pressures.
  • Fed policymakers still expect two rate cuts this year, contingent on how trade‐driven inflation dynamics evolve.
  • The dollar has lost about 10% of its value against the euro over the past six months due to trade policy uncertainty, fueling imported inflation worries.
  • Escalation in the Israel-Iran conflict has driven oil prices toward $75 a barrel and added to global market volatility.