Washington: The U.S. Federal Reserve announced on Wednesday that it would maintain its benchmark interest rate unchanged for the second consecutive period, while projecting a single rate cut within the year. This decision comes amid growing concerns over the economic impact of the ongoing U.S.-Israeli conflict against Iran.

According to Yonhap News Agency, the Federal Open Market Committee (FOMC) opted to keep the interest rate stable within the 3.5-3.75 percent range during its latest meeting. This decision leaves a gap of up to 1.25 percentage points between the key rates of South Korea and the United States. The Fed's decision reflects its challenge in balancing the effects of rising oil prices, potential inflation, and a weak U.S. employment report that revealed a loss of 92,000 jobs last month.

FOMC members' new median economic projections indicate that the federal funds rate is expected to decline to 3.4 percent by the end of the year, mirroring the December forecast. This suggests the possibility of a quarter percentage point cut later this year. The central bank emphasized economic uncertainties resulting from the ongoing Middle Eastern conflict in its press release.

"Uncertainty about the economic outlook remains elevated," the statement highlighted. "The implications of developments in the Middle East for the U.S. economy are uncertain. The committee is attentive to the risks to both sides of its dual mandate," it added, referencing the Fed's goals of maximum employment and maintaining a 2 percent inflation rate.

The U.S. gross domestic product is anticipated to grow by 2.4 percent this year, slightly higher than the 2.3 percent projected in December, and by 2.3 percent next year, up from the earlier forecast of 2 percent, according to the median projection. Personal Consumption Expenditures (PCE) inflation is expected to rise to 2.7 percent by the end of the year, exceeding the December prediction of 2.4 percent, and to 2.2 percent by the end of next year, compared to the previous 2.1 percent forecast. PCE tracks household consumer spending on goods and services in the U.S.