WASHINGTON: The US Federal Reserve kept interest rates unchanged as expected on Wednesday, in defiance of President Donald Trump, as the world’s largest economy battles stubborn inflation, weak labour demand and an “uncertain” economic outlook due to the war in Iran.

The 11-1 vote kept rates steady at a range of 3.50 per cent to 3.75pc, 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 central 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 2pc while ensuring maximum employment.

With war in the Middle East causing global oil prices to spike, potentially fuelling widespread inflation and curbing growth, analysts said policymakers were unlikely to make any immediate moves.

Affordability has been a key political issue for Trump, who has repeatedly called for rates to be slashed even as price increases have remained stubbornly high. “Uncertainty about the economic outlook remains elevated,” the Fed said Wednesday, while noting that economic activity was “expanding at a solid pace.”

Published in Dawn, March 19th, 2026