The US Federal Reserve left interest rates unchanged on Wednesday (July 29) for a fifth consecutive meeting, but growing inflation concerns linked to the Iran war led three policymakers to back a quarter percentage-point increase in borrowing costs. The Federal Open Market Committee (FOMC), the Fed's rate-setting panel, voted to keep the benchmark interest rate in the 3.50 per cent to 3.75 per cent range, a decision that financial markets had widely expected.&nbsp;However, the outcome revealed a sharper divide among policymakers as inflation risks resurfaced following higher energy and commodity prices triggered by President Donald Trump's war on Iran.Fed Chair Kevin Warsh said the US economy remained resilient in terms of employment, but inflation continued to be a major concern.&nbsp;Also read: <a href="https://www.wionews.com/world/we-re-going-to-be-hitting-them-very-hard-trump-vows-heavy-strike-after-us-intercepts-iranian-missile-attack-1785353856416">‘We're going to be hitting them very hard’: Trump vows heavy strike after US intercepts Iranian missile attack</a>&nbsp;"We're doing pretty well collectively as a country, as policymakers on the full employment side," Warsh said after the meeting. "But we're doing considerably less well on prices. That's why we describe them as elevated and that's what's taken most of our discussion in terms of transmission mechanisms of monetary policy," he added.&nbsp;According to the Fed, nine of the 12 policymakers believed the current interest rate was appropriate for the economy. However, officials from the Cleveland, Dallas and Minneapolis Federal Reserve banks dissented, arguing that rates should be raised by 0.25 percentage points to counter rising inflation.&nbsp;Also read: <a href="https://www.wionews.com/world/he-wants-me-to-stay-involved-trump-says-netanyahu-publicised-iran-intel-to-keep-us-engaged-1785282887695">'He wants me to stay involved': Trump says Netanyahu publicised Iran intel to keep US engaged</a>&nbsp;The three policymakers had also favoured a more restrictive monetary policy at the Fed's previous meeting.&nbsp;US inflation eased to an annual rate of 3.5 per cent last month, but economists expect price pressures to intensify again as oil prices fluctuate due to the conflict involving Iran. The rise in energy costs has also contributed to higher global food prices, adding to inflationary pressures.&nbsp;

The US Federal Reserve maintained benchmark interest rates at 3.50 per cent–3.75 per cent, but a three-vote dissent favored a quarter-point hike due to rising inflation driven by energy costs from the Iran war.

The US Federal Reserve left interest rates unchanged on Wednesday (July 29) for a fifth consecutive meeting, but growing inflation concerns linked to the Iran war led three policymakers to back a quarter percentage-point increase in borrowing costs. The Federal Open Market Committee (FOMC), the Fed's rate-setting panel, voted to keep the benchmark interest rate in the 3.50 per cent to 3.75 per cent range, a decision that financial markets had widely expected. However, the outcome revealed a sharper divide among policymakers as inflation risks resurfaced following higher energy and commodity prices triggered by President Donald Trump's war on Iran. Fed Chair Kevin Warsh said the US economy remained resilient in terms of employment, but inflation continued to be a major concern. Also read: ‘We're going to be hitting them very hard’: Trump vows heavy strike after US intercepts Iranian missile attack "We're doing pretty well collectively as a country, as policymakers on the full employment side," Warsh said after the meeting. "But we're doing considerably less well on prices. That's why we describe them as elevated and that's what's taken most of our discussion in terms of transmission mechanisms of monetary policy," he added. According to the Fed, nine of the 12 policymakers believed the current interest rate was appropriate for the economy. However, officials from the Cleveland, Dallas and Minneapolis Federal Reserve banks dissented, arguing that rates should be raised by 0.25 percentage points to counter rising inflation. Also read: 'He wants me to stay involved': Trump says Netanyahu publicised Iran intel to keep US engaged The three policymakers had also favoured a more restrictive monetary policy at the Fed's previous meeting. US inflation eased to an annual rate of 3.5 per cent last month, but economists expect price pressures to intensify again as oil prices fluctuate due to the conflict involving Iran. The rise in energy costs has also contributed to higher global food prices, adding to inflationary pressures.

The US Federal Reserve maintained benchmark interest rates at 3.50 per cent–3.75 per cent, but a three-vote dissent favored a quarter-point hike due to rising inflation driven by energy costs from the Iran war.

US Fed keeps rates unchanged, but Iran war price pressures trigger unusual split

US inflation in May reached its highest level with the fastest rate in three years, surging to 4.2 per cent. The rise in prices in the US from 3.8 per cent a month earlier was largely due to an upsurge in energy costs, the Bureau of Labour Statistics (BLS) said. The inflation marked the third month in a row that the Consumer Price Index (CPI) rose, with households continuously feeling the strain of the US-Israeli war in Iran. Rising inflation has increased expectations that the US Federal Reserve could raise interest rates to curtail consumer spending and ease price pressures. The last time inflation reached a higher level was in April 2023, when the US economy was grappling with the effects of the energy crisis triggered by Russia's invasion of Ukraine.&nbsp;Also read: <a href="https://www.wionews.com/business-economy/big-boost-for-rupee-rbi-s-forex-push-could-bring-55-65-billion-inflows-in-fy27-says-sbi-1781096044339">Big boost for Rupee? RBI's forex push could bring $55–65 billion inflows in FY27, says SBI</a><h3>What is the real cause of US inflation?</h3>Energy costs have been a major contributor to the latest increase, with household gas and electricity bills in May standing nearly 25 per cent higher than a year ago. Petrol prices have accounted for a significant share of the rise. Data from the motoring group AAA showed that the average price of regular gasoline in the US currently stands at $4.15 per gallon, up sharply from $2.98 on February 28, when President Donald Trump launched strikes against Iran. Following those attacks, Iran effectively shut down the strategically important Strait of Hormuz, a key shipping route that normally carries about one-fifth of the world's oil and gas supplies, pushing global energy prices higher. The US Bureau of Labour Statistics (BLS) also highlighted rising costs in sectors such as air travel, healthcare, recreation and communications. The Consumer Price Index (CPI) measures the change in prices compared with the same month a year earlier. The Federal Reserve's long-term inflation target remains 2 per cent.

US inflation climbed to 4.2% in May, its highest level in three years, driven largely by soaring energy costs. Rising fuel and utility prices, linked to tensions involving Iran and disruptions in the Strait of Hormuz, have heightened expectations of a Federal Reserve rate hike.

US inflation in May reached its highest level with the fastest rate in three years, surging to 4.2 per cent. The rise in prices in the US from 3.8 per cent a month earlier was largely due to an upsurge in energy costs, the Bureau of Labour Statistics (BLS) said. The inflation marked the third month in a row that the Consumer Price Index (CPI) rose, with households continuously feeling the strain of the US-Israeli war in Iran. Rising inflation has increased expectations that the US Federal Reserve could raise interest rates to curtail consumer spending and ease price pressures. The last time inflation reached a higher level was in April 2023, when the US economy was grappling with the effects of the energy crisis triggered by Russia's invasion of Ukraine. Also read: Big boost for Rupee? RBI's forex push could bring $55–65 billion inflows in FY27, says SBI What is the real cause of US inflation? Energy costs have been a major contributor to the latest increase, with household gas and electricity bills in May standing nearly 25 per cent higher than a year ago. Petrol prices have accounted for a significant share of the rise. Data from the motoring group AAA showed that the average price of regular gasoline in the US currently stands at $4.15 per gallon, up sharply from $2.98 on February 28, when President Donald Trump launched strikes against Iran. Following those attacks, Iran effectively shut down the strategically important Strait of Hormuz, a key shipping route that normally carries about one-fifth of the world's oil and gas supplies, pushing global energy prices higher. The US Bureau of Labour Statistics (BLS) also highlighted rising costs in sectors such as air travel, healthcare, recreation and communications. The Consumer Price Index (CPI) measures the change in prices compared with the same month a year earlier. The Federal Reserve's long-term inflation target remains 2 per cent.

US inflation climbed to 4.2% in May, its highest level in three years, driven largely by soaring energy costs. Rising fuel and utility prices, linked to tensions involving Iran and disruptions in the Strait of Hormuz, have heightened expectations of a Federal Reserve rate hike.

US inflation climbs to 4.2%, highest in three years: Here's why

The Federal Reserve's policy-making committee began its scheduled two-day meeting today, Tuesday, April 28, 2026. This is widely expected to be the final meeting of Jerome Powell as Fed Chair after eight years at the helm. The committee will announce its third-rate decision of 2026 on Wednesday. He will be replaced by Trump's nominee Kevin Warsh on May 15.&nbsp;<h2>What to expect from the Fed's meeting?</h2>The overwhelming consensus from the economists is that the Federal Open Market Committee, or FOMC, will hold rates steady, within its current range of 3.5 per cent to 3.75 per cent. While the Fed's own projections earlier this year signalled a single 0.25 per cent rate cut sometime in 2026, recent geopolitical and economic shocks have made that less certain. The war in West Asia has pushed energy prices and inflation to their highest level in almost two years. &nbsp;With Brent crude near $110 per barrel, analysts from StoneX report that markets now see only a 35% chance of even one rate cut this year.Also Read: <a href="https://www.wionews.com/photos/irgc-subsea-cables-strait-of-hormuz-digital-chokepoint-1777373875901">Hormuz is a digital chokepoint: How can the US-Iran war threaten internet connectivity?</a>"The FOMC is likely to reiterate its wait-and-see message at its April meeting this week because the war with Iran continues to cloud the economic outlook and to present risks to both inflation and activity," said economists at Goldman Sachs. While a rate cut would make it easier for US consumers to borrow easily, it would push inflation even higher, which would be pushed into all other economies. It seems extremely unlikely as officials confront a lacklustre job market. However, a rate cut might help businesses to hire more workers, but the job market is not in that dire need of a push that they would risk further inflation. "The labour market is plugging along without much steam, but it's still plugging along," said Elizabeth Renter, a senior analyst at NerdWallet, to CBS News. The CPI Index for March was at 3.3 per cent on an annual basis, well above the Fed's target rate of 2 per cent, and the highest since May 2024.<h2>Kevin Warsh to deliver Trump's rate cut?</h2>Trump's nominee, Warsh, says that he is looking for a "good family fight" at the policy-making table once he takes over the US central bank, as Trump is urging for an interest rate cut. Of the 19 Fed officials who set interest rates, about a third are solidly centrist, and only three have agreed to a near-term cut in borrowing rates. Warsh, at his confirmation hearing, did not reiterate his support for rate cuts, which he promised to deliver when US President Donald Trump was considering his nominee for the Fed Chair.&nbsp;

The Federal Reserve begins its two-day meeting, likely holding rates steady as Jerome Powell prepares to step down and Kevin Warsh takes over.

The Federal Reserve's policy-making committee began its scheduled two-day meeting today, Tuesday, April 28, 2026. This is widely expected to be the final meeting of Jerome Powell as Fed Chair after eight years at the helm. The committee will announce its third-rate decision of 2026 on Wednesday. He will be replaced by Trump's nominee Kevin Warsh on May 15. What to expect from the Fed's meeting? The overwhelming consensus from the economists is that the Federal Open Market Committee, or FOMC, will hold rates steady, within its current range of 3.5 per cent to 3.75 per cent. While the Fed's own projections earlier this year signalled a single 0.25 per cent rate cut sometime in 2026, recent geopolitical and economic shocks have made that less certain. The war in West Asia has pushed energy prices and inflation to their highest level in almost two years. With Brent crude near $110 per barrel, analysts from StoneX report that markets now see only a 35% chance of even one rate cut this year. Also Read: Hormuz is a digital chokepoint: How can the US-Iran war threaten internet connectivity? "The FOMC is likely to reiterate its wait-and-see message at its April meeting this week because the war with Iran continues to cloud the economic outlook and to present risks to both inflation and activity," said economists at Goldman Sachs. While a rate cut would make it easier for US consumers to borrow easily, it would push inflation even higher, which would be pushed into all other economies. It seems extremely unlikely as officials confront a lacklustre job market. However, a rate cut might help businesses to hire more workers, but the job market is not in that dire need of a push that they would risk further inflation. "The labour market is plugging along without much steam, but it's still plugging along," said Elizabeth Renter, a senior analyst at NerdWallet, to CBS News. The CPI Index for March was at 3.3 per cent on an annual basis, well above the Fed's target rate of 2 per cent, and the highest since May 2024. Kevin Warsh to deliver Trump's rate cut? Trump's nominee, Warsh, says that he is looking for a "good family fight" at the policy-making table once he takes over the US central bank, as Trump is urging for an interest rate cut. Of the 19 Fed officials who set interest rates, about a third are solidly centrist, and only three have agreed to a near-term cut in borrowing rates. Warsh, at his confirmation hearing, did not reiterate his support for rate cuts, which he promised to deliver when US President Donald Trump was considering his nominee for the Fed Chair.

The Federal Reserve begins its two-day meeting, likely holding rates steady as Jerome Powell prepares to step down and Kevin Warsh takes over.

Fed third meeting of 2026: Final Powell decision, rates likely unchanged

The Federal Reserve on Wednesday cut its benchmark interest rate by a quarter-point for the second time this year, a step that could bring some financial relief to consumers and businesses but also runs some risk as inflation has been creeping up. The central bank said in a statement while making the rate-cut announcement that though the economic activity has been expanding, jobs growth had slowed and inflation had gone up. &nbsp;The rate cut will reduce the cost of borrowing in the economy and will have immediate effects on auto loans and credit cards and even though mortgage rates are not directly tied to the benchmark rate, they often move in parallel.&nbsp;Also Read: <a href="https://www.wionews.com/world/nvidia-scripts-history-becomes-first-firm-to-reach-5-trillion-market-value-following-ai-boom-1761748694795">Riding on AI boom, Nvidia scripts history, becomes first firm to reach $5 trillion market value</a>&nbsp;Fed Chair Jerome Powell cautioned in a press conference that the government shutdown, which started Oct. 1, would weigh on economic activity as it drags on but added that those effects would reverse once it ends.&nbsp;Deadlines for funding food assistance and salaries for federal workers, including air-traffic controllers and TSA agents, are set to hit this week, while Congress remains in a stalemate.&nbsp;Also Read: <a href="https://www.wionews.com/world/-will-push-them-back-into-caves-tails-between-their-legs-pak-minister-says-will-obliterate-afghan-taliban-1761741971619">Will push them back into caves…tails between their legs’: Pak minister says will ‘obliterate’ Afghan Taliban</a>&nbsp;The rate cut comes as the US economy is grappling with a slowing labour market and stubborn price growth. Several major companies have announced thousands of job cuts, while many government workers remain furloughed due to shutdown. As per federal data, price growth in September was at its highest point since January.The Fed’s next rate decision is scheduled for Dec. 10. Powell said that there were “strongly differing views” about what the Fed should do at its next meeting.&nbsp;Also Read: <a href="https://www.wionews.com/world/pak-defence-minister-khawaja-asif-admits-country-s-past-role-in-supporting-afghanistan-taliban-1761755033225">Pak Defence Minister Khawaja Asif admits country’s past role in supporting Afghanistan Taliban</a>&nbsp;“Policy is not on a preset course,” Powell said.Usually, when the labour market slows down, lower rates spur economic activity, and during rising inflation, the Fed hikes rates to curb rising prices. The Fed faces a dilemma currently when data simultaneously shows a weakening employment and price rise.Lower interest rates sometimes worsen inflation by increasing overall economic activity.&nbsp;Jobs data suggests the US is experiencing one of the weakest labour markets of the 21st century. Stocks were moderately higher after the announcement Wednesday.&nbsp;WATCH: Strategic Shift By Trump Administration Rattles European Allies<a href="https://www.wionews.com/videos/strategic-shift-by-trump-administration-rattles-european-allies-1761764882579/embed">https://www.wionews.com/videos/strategic-shift-by-trump-administration-rattles-european-allies-1761764882579/embed</a>&nbsp;&nbsp;

Usually, when the labour market slows down, lower rates spur economic activity, and during rising inflation, the Fed hikes rates to curb rising prices. The Fed faces a dilemma currently when data simultaneously shows a weakening employment and price rise.

The Federal Reserve on Wednesday cut its benchmark interest rate by a quarter-point for the second time this year, a step that could bring some financial relief to consumers and businesses but also runs some risk as inflation has been creeping up. The central bank said in a statement while making the rate-cut announcement that though the economic activity has been expanding, jobs growth had slowed and inflation had gone up. The rate cut will reduce the cost of borrowing in the economy and will have immediate effects on auto loans and credit cards and even though mortgage rates are not directly tied to the benchmark rate, they often move in parallel. Also Read: Riding on AI boom, Nvidia scripts history, becomes first firm to reach $5 trillion market value Fed Chair Jerome Powell cautioned in a press conference that the government shutdown, which started Oct. 1, would weigh on economic activity as it drags on but added that those effects would reverse once it ends. Deadlines for funding food assistance and salaries for federal workers, including air-traffic controllers and TSA agents, are set to hit this week, while Congress remains in a stalemate. Also Read: Will push them back into caves…tails between their legs’: Pak minister says will ‘obliterate’ Afghan Taliban The rate cut comes as the US economy is grappling with a slowing labour market and stubborn price growth. Several major companies have announced thousands of job cuts, while many government workers remain furloughed due to shutdown. As per federal data, price growth in September was at its highest point since January. The Fed’s next rate decision is scheduled for Dec. 10. Powell said that there were “strongly differing views” about what the Fed should do at its next meeting. Also Read: Pak Defence Minister Khawaja Asif admits country’s past role in supporting Afghanistan Taliban “Policy is not on a preset course,” Powell said. Usually, when the labour market slows down, lower rates spur economic activity, and during rising inflation, the Fed hikes rates to curb rising prices. The Fed faces a dilemma currently when data simultaneously shows a weakening employment and price rise. Lower interest rates sometimes worsen inflation by increasing overall economic activity. Jobs data suggests the US is experiencing one of the weakest labour markets of the 21st century. Stocks were moderately higher after the announcement Wednesday. WATCH: Strategic Shift By Trump Administration Rattles European Allies https://www.wionews.com/videos/strategic-shift-by-trump-administration-rattles-european-allies-1761764882579/embed

Usually, when the labour market slows down, lower rates spur economic activity, and during rising inflation, the Fed hikes rates to curb rising prices. The Fed faces a dilemma currently when data simultaneously shows a weakening employment and price rise.

Federal Reserve cuts key rate for the second time amid hiring slowdown, rising prices and shutdown

US Federal Reserve Chair Jerome Powell left the door open to cutting interest rates in a keenly watched speech Friday, as he faces President Donald Trump's intensifying pressure on the central bank.Last year, the Fed chair used his keynote speech at the Jackson Hole Economic Policy Symposium to indicate the time had come for interest rate cuts. This time, however, the picture is murkier.Powell faces constant attacks from Trump -- who is aggressively pushing the independent bank for rate cuts -- alongside mixed economic data leading him towards a cautious approach.Powell warned Friday that the risks of higher inflation and a weakening jobs market add up to a "challenging situation.""Downside risks to employment are rising," Powell said in his speech, warning that these challenges could materialize quickly in the form of layoffs."While the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers," he noted.He added that "the effects of tariffs on consumer prices are now clearly visible" and expected to accumulate over the coming months.He said there is high uncertainty about the timing and extent of the tariffs' impact.But he vowed: "We will not allow a one-time increase in the price level to become an ongoing inflation problem."Confronted with these dual challenges, Powell alluded to a possible rate cut: "With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."This marked his final Jackson Hole speech at the helm of the Fed, with his term as chair ending in May 2026.<h2>Gradual cuts</h2>"That's about as clear cut as Powell can get" in signaling that he leans towards a September rate cut, said Navy Federal Credit Union chief economist Heather Long."While he is committed to ensuring that the tariff shocks are a one-time impact on inflation, he is telegraphing that the jobs situation is deteriorating quickly and that is the biggest risk now," she added in a note.Wall Street rallied Friday after Powell's remarks, with both the Dow and Nasdaq climbing around 2.0 percent at about midday. Treasury yields, which are sensitive to monetary policy developments, pulled back.CME Group's FedWatch Tool showed the market sees around a 90-percent chance of a September rate cut, with the probability surging following Powell's address.But Ryan Sweet, chief US economist at Oxford Economics, said the next rate reduction might not be "the beginning of a series.""Powell stressed that policy isn't on a preset course and will continue to be based on the incoming data and the balance of risks," Sweet said.Powell appears to be setting the stage for a "gradual approach" to adjusting rates, he added.<h2>Trump pressure</h2>For now, the Fed sees intensifying pressure from the Trump administration on various fronts.Trump said Friday that he would fire Fed governor Lisa Cook if she did not resign, after lashing out at her over claims of mortgage fraud.But the president is limited in his ability to remove officials from the central bank.Cook previously stated that she had "no intention of being bullied to step down," although she indicated she would take questions about her financial history seriously.Trump has also made no secret of his disdain for Powell, repeatedly saying that the Fed chair has been "too late" in lowering interest rates and calling him a "numbskull" and "moron."He has also taken aim at Powell over the Fed's headquarters renovation in Washington, at one point suggesting that cost overruns could be cause for ousting the central banker.The Fed, which holds its next policy meeting in mid-September, has kept interest rates steady at a range of between 4.25 percent and 4.50 percent since its last reduction in December.Policymakers cited resilience in the labor market as they monitored the effects of Trump's tariffs on the world's biggest economy.But cracks have emerged in the jobs market, which could lead to lower rates to boost the economy. &nbsp;

Fed Chair Jerome Powell hints at potential interest rate cuts amid Trump’s mounting pressure, inflation risks, and labor market uncertainty, stressing the need for caution as economic signals remain mixed.

US Federal Reserve Chair Jerome Powell left the door open to cutting interest rates in a keenly watched speech Friday, as he faces President Donald Trump's intensifying pressure on the central bank. Last year, the Fed chair used his keynote speech at the Jackson Hole Economic Policy Symposium to indicate the time had come for interest rate cuts. This time, however, the picture is murkier. Powell faces constant attacks from Trump -- who is aggressively pushing the independent bank for rate cuts -- alongside mixed economic data leading him towards a cautious approach. Powell warned Friday that the risks of higher inflation and a weakening jobs market add up to a "challenging situation." "Downside risks to employment are rising," Powell said in his speech, warning that these challenges could materialize quickly in the form of layoffs. "While the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers," he noted. He added that "the effects of tariffs on consumer prices are now clearly visible" and expected to accumulate over the coming months. He said there is high uncertainty about the timing and extent of the tariffs' impact. But he vowed: "We will not allow a one-time increase in the price level to become an ongoing inflation problem." Confronted with these dual challenges, Powell alluded to a possible rate cut: "With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance." This marked his final Jackson Hole speech at the helm of the Fed, with his term as chair ending in May 2026. Gradual cuts "That's about as clear cut as Powell can get" in signaling that he leans towards a September rate cut, said Navy Federal Credit Union chief economist Heather Long. "While he is committed to ensuring that the tariff shocks are a one-time impact on inflation, he is telegraphing that the jobs situation is deteriorating quickly and that is the biggest risk now," she added in a note. Wall Street rallied Friday after Powell's remarks, with both the Dow and Nasdaq climbing around 2.0 percent at about midday. Treasury yields, which are sensitive to monetary policy developments, pulled back. CME Group's FedWatch Tool showed the market sees around a 90-percent chance of a September rate cut, with the probability surging following Powell's address. But Ryan Sweet, chief US economist at Oxford Economics, said the next rate reduction might not be "the beginning of a series." "Powell stressed that policy isn't on a preset course and will continue to be based on the incoming data and the balance of risks," Sweet said. Powell appears to be setting the stage for a "gradual approach" to adjusting rates, he added. Trump pressure For now, the Fed sees intensifying pressure from the Trump administration on various fronts. Trump said Friday that he would fire Fed governor Lisa Cook if she did not resign, after lashing out at her over claims of mortgage fraud. But the president is limited in his ability to remove officials from the central bank. Cook previously stated that she had "no intention of being bullied to step down," although she indicated she would take questions about her financial history seriously. Trump has also made no secret of his disdain for Powell, repeatedly saying that the Fed chair has been "too late" in lowering interest rates and calling him a "numbskull" and "moron." He has also taken aim at Powell over the Fed's headquarters renovation in Washington, at one point suggesting that cost overruns could be cause for ousting the central banker. The Fed, which holds its next policy meeting in mid-September, has kept interest rates steady at a range of between 4.25 percent and 4.50 percent since its last reduction in December. Policymakers cited resilience in the labor market as they monitored the effects of Trump's tariffs on the world's biggest economy. But cracks have emerged in the jobs market, which could lead to lower rates to boost the economy.

Fed Chair Jerome Powell hints at potential interest rate cuts amid Trump’s mounting pressure, inflation risks, and labour market uncertainty, stressing the need for caution as economic signals remain mixed.

US Fed Chair Powell signals possible rate cuts amid Trump pressure and economic uncertainty

The latest readings suggest that President Donald Trump’s higher import duties, part of his ongoing trade crackdowns are starting to work their way into consumer prices. Bloomberg notes that a separate measure of core services inflation remains tame for now, but economists expect gradual increases in the coming months. For the Federal Reserve, this creates a policy challenge. Officials have kept interest rates unchanged in 2025, seeking clarity on whether tariffs will cause sustained inflation. But they must also weigh signs of a cooling labour market, the other half of their dual mandate.<h2>Consumers still spending, for now</h2>Retail sales data due Friday is expected to show a solid July increase, boosted by incentives on vehicle purchases and online shopping spikes during Amazon’s Prime Day. However, Bloomberg reports that once adjusted for inflation, the figures may point to a more lacklustre consumer spending environment. Manufacturing data from the Fed is likely to show stagnant factory output as producers navigate shifting tariff rules. Meanwhile, a preliminary US–China trade truce is set to expire on Tuesday, although an extension remains possible.<h2>Global markets eye central bank's move&nbsp;</h2>Beyond the US, Bloomberg notes that the Bank of Canada will publish minutes from its decision to hold rates at 2.75 per cent for a third meeting, while leaving the door open for cuts if inflation remains contained. July home sales data will also indicate whether recent gains have continued. Asia’s economic calendar is packed, with China releasing July activity data, including industrial production, retail sales, and jobless figures on Friday. Australia’s central bank is expected to cut rates for a third time this year, while India’s CPI and wholesale price data will offer fresh insight into price trends before Trump’s 50 per cent tariff on Indian goods fully kicks in.&nbsp;In Europe, the UK will release wage growth and GDP figures in the wake of the Bank of England’s latest rate cut, while Switzerland’s economy may show a sudden contraction even before Trump’s 39 per cent tariff impact takes hold. Africa and Latin America will also see rate decisions and inflation reports, with Brazil, Argentina, and Chile updating price data, and Kenya, Uganda, and Namibia adjusting policy to manage growth and price stability.&nbsp;The coming week’s data, as per Bloomberg, will help clarify whether the US inflation uptick is temporary or the start of a broader trend. If tariffs continue to feed through to consumer prices, the Fed may face mounting pressure to act, even as global markets adjust to a wave of central bank decisions and shifting trade policies.&nbsp;(With input from the agencies)&nbsp;

Trump 50% tariff on Indian goods and levies on other nations are reshaping global markets, from US inflation pressures to rate decisions in Asia, Europe, and Latin America. This week data will test how far the ripple effects go.

The latest readings suggest that President Donald Trump’s higher import duties, part of his ongoing trade crackdowns are starting to work their way into consumer prices. Bloomberg notes that a separate measure of core services inflation remains tame for now, but economists expect gradual increases in the coming months. For the Federal Reserve, this creates a policy challenge. Officials have kept interest rates unchanged in 2025, seeking clarity on whether tariffs will cause sustained inflation. But they must also weigh signs of a cooling labour market, the other half of their dual mandate. Consumers still spending, for now Retail sales data due Friday is expected to show a solid July increase, boosted by incentives on vehicle purchases and online shopping spikes during Amazon’s Prime Day. However, Bloomberg reports that once adjusted for inflation, the figures may point to a more lacklustre consumer spending environment. Manufacturing data from the Fed is likely to show stagnant factory output as producers navigate shifting tariff rules. Meanwhile, a preliminary US–China trade truce is set to expire on Tuesday, although an extension remains possible. Global markets eye central bank's move Beyond the US, Bloomberg notes that the Bank of Canada will publish minutes from its decision to hold rates at 2.75 per cent for a third meeting, while leaving the door open for cuts if inflation remains contained. July home sales data will also indicate whether recent gains have continued. Asia’s economic calendar is packed, with China releasing July activity data, including industrial production, retail sales, and jobless figures on Friday. Australia’s central bank is expected to cut rates for a third time this year, while India’s CPI and wholesale price data will offer fresh insight into price trends before Trump’s 50 per cent tariff on Indian goods fully kicks in. In Europe, the UK will release wage growth and GDP figures in the wake of the Bank of England’s latest rate cut, while Switzerland’s economy may show a sudden contraction even before Trump’s 39 per cent tariff impact takes hold. Africa and Latin America will also see rate decisions and inflation reports, with Brazil, Argentina, and Chile updating price data, and Kenya, Uganda, and Namibia adjusting policy to manage growth and price stability. The coming week’s data, as per Bloomberg, will help clarify whether the US inflation uptick is temporary or the start of a broader trend. If tariffs continue to feed through to consumer prices, the Fed may face mounting pressure to act, even as global markets adjust to a wave of central bank decisions and shifting trade policies. (With input from the agencies)

As US tariffs push some prices higher, the Fed faces a tough call: act against potential inflation or hold rates amid signs of economic slowdown. Global markets brace for a week of key central bank moves and trade policy shifts.

US inflation set to tick higher as Trump tariffs hit consumers

The US Federal Reserve on December 11 held interest rates steady and signaled borrowing costs will not change anytime soon, with moderate economic growth and historically low unemployment expected to persist through the 2020 presidential election.

US fed keeps rates on hold, points to 'favorable' economic outlook next year

Bank of Japan Governor Haruhiko Kuroda said cutting interest rates further into negative territory is among the bank's policy options, according to an interview with the Nikkei newspaper published on Friday.

Cutting rates "further into the negative zone is always an option," the newspaper quoted him as saying in the interview, held on Thursday.

Kuroda said while Japan's economy was sustaining momentum to achieve the BOJ's 2 per cent&nbsp;inflation target, risks surrounding the overseas economy were heightening.

"There are various things we can do, such as combining various tools or enhancing them," Kuroda was quoted as saying on what the BOJ could do if it were to ease again.

But Kuroda also stressed that the BOJ must take into account the impact any policy change could have on Japan's banking system and financial market functions.

Life insurers and pension funds have seen the return on their investments decline significantly due to falling long-term yields, which could hurt consumer sentiment, he said.

Kuroda also said yields on super-long Japanese government bonds with maturities of 20 or 30 years have "fallen a bit too far."

Markets are rife with speculation the BOJ could ease policy as early as this month to fend off an unwelcome yen spike that could be caused by expected monetary easing steps by the US Federal Reserve and the European Central Bank.

But some BOJ policymakers are wary of ramping up stimulus due to the rising cost of prolonged easings, such as the strain years of ultra-low interest rates are inflicting on financial institutions

Bank of Japan Governor Haruhiko Kuroda said cutting interest rates further into negative territory is among the bank's policy options, according to an interview with the Nikkei newspaper published on Friday.

Bank of Japan Governor Haruhiko Kuroda said cutting interest rates further into negative territory is among the bank's policy options, according to an interview with the Nikkei newspaper published on Friday. Cutting rates "further into the negative zone is always an option," the newspaper quoted him as saying in the interview, held on Thursday. Kuroda said while Japan's economy was sustaining momentum to achieve the BOJ's 2 per cent inflation target, risks surrounding the overseas economy were heightening. "There are various things we can do, such as combining various tools or enhancing them," Kuroda was quoted as saying on what the BOJ could do if it were to ease again. But Kuroda also stressed that the BOJ must take into account the impact any policy change could have on Japan's banking system and financial market functions. Life insurers and pension funds have seen the return on their investments decline significantly due to falling long-term yields, which could hurt consumer sentiment, he said. Kuroda also said yields on super-long Japanese government bonds with maturities of 20 or 30 years have "fallen a bit too far." Markets are rife with speculation the BOJ could ease policy as early as this month to fend off an unwelcome yen spike that could be caused by expected monetary easing steps by the US Federal Reserve and the European Central Bank. But some BOJ policymakers are wary of ramping up stimulus due to the rising cost of prolonged easings, such as the strain years of ultra-low interest rates are inflicting on financial institutions

Bank of Japan's Kuroda says deepening negative rates is among options: Nikkei

Gold turned lower on Thursday, as Sterling bounced higher and US stock markets came well off their lows following the suspension of Britain&#39;s campaign for next week&#39;s referendum after a member of Parliament was shot dead. 
 
British Member of Parliament Jo Cox, who was killed in the street in her constituency in northern England earlier in the day, had been a vocal supporter of Britain remaining within the EU. 
 
The turnaround in bullion prices, their first drop in seven sessions, came after rallying to the highest in nearly two years, buoyed by the US Federal Reserve, which sounded a dovish note after its latest policy meeting on Wednesday. 
 
In Euro and Sterling terms, the metal turned lower after reaching three-year highs. 
 
Spot gold was down 0.4 per cent at $1,285.76 an ounce by 2:40 pm EDT (1840 GMT), after rising to $1,315.55 an ounce, the highest since August 2014. 
 
Spot prices have bounced 6 per cent this month, after the approaching June 23 referendum - when Britons will vote on whether or not to leave the European Union, dubbed &quot;Brexit&quot; - dented appetite for assets viewed as higher risk, sending investors scurrying for bonds and gold. 
 
After the attack, campaigning for next week&#39;s referendum was suspended. 
 
U.S. gold futures for August delivery settled up 0.8 percent at $1,298.40 an ounce. 
 
&quot;A rebound in the euro and sterling, and a mirrored decline in the dollar, set gold up for a retracement,&quot; said James Steel, chief metals analyst for HSBC Securities in New York. 
 
&quot;Recovery in equities may also imply some dimming in risk-off related purchases of gold.&quot; 
 
Yields on most U.S. Treasury yields rose to session highs after British campaigning for the Brexit vote was suspended following MP Cox&#39;s death. 
 
Expectations that the U.S. central bank would press ahead with interest rate increases over the summer faded earlier this month after the release of weak U.S. payrolls data for May. 
 
&quot;Brexit worries then gave us the next boost and yesterday the FOMC provided enough dovish ammunition for it to make a new high,&quot; said Saxo Bank&#39;s head of commodity research, Ole Hansen. 
 
On Wednesday, holdings in the world&#39;s largest gold-backed exchange-traded fund, SPDR Gold Shares, rose to the highest since October 2013. 
 
Silver fell 0.4 percent to $17.43 an ounce, platinum lost 0.1 percent to $969.67 and palladium was up 0.2 percent at $533.11. 
(Reuters)

US stock markets came well off their lows following the suspension of Britain's referendum campaign after the death of British MP

Gold turned lower on Thursday, as Sterling bounced higher and US stock markets came well off their lows following the suspension of Britain's campaign for next week's referendum after a member of Parliament was shot dead. British Member of Parliament Jo Cox, who was killed in the street in her constituency in northern England earlier in the day, had been a vocal supporter of Britain remaining within the EU. The turnaround in bullion prices, their first drop in seven sessions, came after rallying to the highest in nearly two years, buoyed by the US Federal Reserve, which sounded a dovish note after its latest policy meeting on Wednesday. In Euro and Sterling terms, the metal turned lower after reaching three-year highs. Spot gold was down 0.4 per cent at $1,285.76 an ounce by 2:40 pm EDT (1840 GMT), after rising to $1,315.55 an ounce, the highest since August 2014. Spot prices have bounced 6 per cent this month, after the approaching June 23 referendum - when Britons will vote on whether or not to leave the European Union, dubbed "Brexit" - dented appetite for assets viewed as higher risk, sending investors scurrying for bonds and gold. After the attack, campaigning for next week's referendum was suspended. U.S. gold futures for August delivery settled up 0.8 percent at $1,298.40 an ounce. "A rebound in the euro and sterling, and a mirrored decline in the dollar, set gold up for a retracement," said James Steel, chief metals analyst for HSBC Securities in New York. "Recovery in equities may also imply some dimming in risk-off related purchases of gold." Yields on most U.S. Treasury yields rose to session highs after British campaigning for the Brexit vote was suspended following MP Cox's death. Expectations that the U.S. central bank would press ahead with interest rate increases over the summer faded earlier this month after the release of weak U.S. payrolls data for May. "Brexit worries then gave us the next boost and yesterday the FOMC provided enough dovish ammunition for it to make a new high," said Saxo Bank's head of commodity research, Ole Hansen. On Wednesday, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, rose to the highest since October 2013. Silver fell 0.4 percent to $17.43 an ounce, platinum lost 0.1 percent to $969.67 and palladium was up 0.2 percent at $533.11. (Reuters)

Gold falls from two-year high as Brexit campaign suspended