The U.S. Federal Reserve is widely expected to hold interest rates at current levels at the conclusion of its June 17 policy meeting.
The American central bank is widely expected to keep its benchmark Fed Funds Rate unchanged at its current range of 3.50% to 3.75%.
It would be the fourth consecutive meeting that the Fed leaves interest rates unchanged after trimming them in the second half of 2025.
This is the first policy meeting to be led by new Federal Reserve Chair Kevin Warsh, who was picked by U.S. President Donald Trump to run the central bank.
Economists say Warsh and the other Fed governors have little leeway to act on interest rates with inflation running hot in the U.S.
The annual inflation rate in America stood at 4.2% in May, its highest level in three years. The Federal Reserve targets inflation at a 2% annualized rate.
However, Fed policymakers could change their post-meeting statement so that it no longer signals the central bank's next move will be to reduce interest rates.
Such a change would suggest to economists and markets that the central bank could leave interest rates unchanged for an extended period or even raise them later this year.
Markets are currently pricing in a 64% chance that the Federal Reserve will raise interest rates by 25-basis points at its December 2026 meeting.
However, odds of a rate hike this year are being adjusted now that the U.S. and Iran appear to have reached a lasting peace deal and crude oil prices have fallen back below $80 U.S. a barrel, exerting downward pressure on inflation.
The Federal Reserve’s next interest rate decision is scheduled for July 29.
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