The Federal Reserve held rates steady, maintaining its expectation of one rate cut in 2026.

The Federal Reserve kept interest rates unchanged on Wednesday and projected rising inflation, stable unemployment, and only one rate cut this year. Officials made these projections as they assessed the economic risks posed by the ongoing wars between the US and Israel with Iran. The new projections indicate that the Fed will cut rates by only 0.25 percentage points by the end of the year, without specifying a timeframe. This view aligns with previous projections and contradicts President Trump's calls for significant rate cuts. The Fed statement said, "The impact of the evolving situation in the Middle East on the US economy remains unclear." The statement also noted that the unemployment rate is currently stable. The new interest rate and economic projections suggest that the Fed has largely ruled out the impact of the oil crisis, and policymakers still expect rate cuts this year and project inflation to reach 2.2% by the end of 2027, close to the central bank's 2% target. Notably, no policymakers believe a further rate hike is needed by the end of this year, although one official projects one rate hike by 2027. (Jinshi)