'No magic wand' to tackle high prices, Fed boss says as US interest rates held
📰 source: bbc_business · 💼 business
the fed held interest rates steady between 3.5% and 3.75% for the fifth straight meeting on wednesday. chair kevin warsh said there is no 'magic wand' to bring down inflation, which remains above the 2% target at 3.5% in the year to june. oil prices rose over 6% to above $89 a barrel due to the middle east conflict, adding to inflation concerns.
policymakers voted 9-3 to hold, with three dissenting in favor of a small hike. warsh said he asked for a 'family fight' and got one. us stock markets ended lower: the s&p 500 hit its lowest level in a month, the nasdaq dropped about 9% from its june record, and the dow fell 2.19%. markets have been rattled by declines in ai-chip stocks and rising oil prices.
warsh, appointed by president trump in may, has stressed the fed's independence despite trump's push for rate cuts. the decision comes less than 100 days before the us mid-term elections, making the economic narrative politically charged.
why it matters: fed holds rates as oil spikes and inflation stays above target, with political pressure from trump ahead of midterms.
source: bbc_business
sentiment: -0.20 · impact: 0.90