The US Federal Reserve is set to announce its latest monetary policy decision on Wednesday, the first under new chair Kevin Warsh, who succeeded the Trump-berated but Wall Street-respected Jerome Powell.
Economists expect the central bank to leave its key interest rate unchanged at a range between 3.5% to 3.75%, marking a fourth consecutive meeting without a move despite elevated inflation and a robust labour market.
Powell remains a member of the Fed's Board of Governors, which sets monetary policy and votes on interest-rate decisions.
The persistently high inflation, due to the consequences of the Iran war, could provoke a rate hike discussion in the coming months.
Last Thursday, the European Central Bank raised its benchmark deposit rate from 2% to 2.25%, saying inflationary pressures from the Iran war was behind the rate hike. It was the first increase since September 2023.
Warsh is said to be close to President Donald Trump, who is strongly advocating lower interest rates. Given the current economic situation, many economists are against a looser monetary policy.
US inflation was last at 4.2%, well above the Fed's target of 2%.
With its rate decisions, the Fed aims to strike a compromise between stable prices and full employment. If the key rate is too high, it slows the economy, for example due to higher borrowing costs. A lower rate stimulates growth and the labour market but can fuel inflation.
