Overview
- The Federal Reserve kept the federal funds rate at 3.50%–3.75% and raised its 2026 PCE inflation projection to about 2.7% from 2.4%.
- Chair Jerome Powell said it is too soon to know the Iran war’s economic impact, noting higher energy prices will push up inflation in the near term.
- Brent crude jumped above roughly $107–$109 a barrel as disruptions around the Strait of Hormuz intensified supply concerns.
- Markets sold off and Treasury yields rose as investors pushed out prospects for policy easing, with some pricing little or no cuts this year and even into 2027.
- The decision was 11–1, with Governor Stephen Miran favoring a 25 bp cut, while other major central banks signaled caution, including a BoC hold and an RBA hike as traders price tighter paths for the ECB and BoE.