Heightened energy prices because of the US-Israel war with Iran has pushed US inflation to a three-year high.Published On 17 Jun 202617 Jun 2026The United States Federal Reserve will hold interest rates steady at 3.5 to 3.75 percent amid heightened inflationary pressures on the US economy.The central bank announced the decision, which was unanimous, on Wednesday following its first two-day policy meeting under the leadership of Kevin Warsh, who took over the job of governor from Jerome Powell last month.Recommended Stories list of 4 itemsend of list“Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East,” the Fed said in a news release.“Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy,” it added.The decision was in line with expectations. CME FedWatch, which tracks the likelihood of monetary policy decisions, said there was a 99 percent chance that rates would remain unchanged.Inflationary pressures loomInflation hit 4.2 percent last week, marking a three-year high, data from the consumer price index report from the US Labor Department — a key gauge the central bank uses to track inflation – showed.That was driven primarily by heightened energy prices, which jumped 23.5 percent in May. However, news of a looming peace deal that could end the war between the US and Iran and reopen the Strait of Hormuz has driven down oil prices in recent days, with prices falling to a three-month low earlier this week.However, even if the Strait opens soon, supply chain bottlenecks, energy production halts, and depleted fuel st …
