US Fed defies Trump to keep interest rates unchanged amid Iran war concerns

The US Federal Reserve kept interest rates unchanged on Wednesday as expected, in defiance of President Donald Trump as the world’s largest economy battles stubborn inflation, weak labour demand and an “uncertain” outlook due to the war in Iran.The Fed’s 11-1 vote kept rates steady at a range between 3.50 per cent and 3.75 per cent, with officials flagging one expected rate cut by the end of the year.“The implications of developments in the Middle East for the US economy are uncertain,” the Fed said in a statement.The bank cut rates three consecutive times late last year before holding them steady at its January meeting.It has a dual mandate of maintaining inflation near a long-term target of 2 per cent while ensuring maximum employment.With US-Israel war on Iran causing global oil prices to spike, potentially fuelling inflation and curbing growth, analysts say policymakers were always unlikely to make any immediate moves.A trader works on the floor of the New York Stock Exchange on Wednesday. Photo: AFP