Seoul: The U.S. Federal Reserve decided to keep its benchmark interest rate steady in a 9-3 decision during its recent meeting, despite ongoing economic concerns linked to renewed conflicts in Iran and President Donald Trump's calls for lower borrowing costs.

According to Yonhap News Agency, the Federal Open Market Committee (FOMC) opted to maintain the rate within the 3.5-3.75 percent range, marking the fifth consecutive pause and leaving a 1 percentage point gap between the key interest rates of South Korea and the United States. Fed Chair Kevin Warsh emphasized the central bank's commitment to a 2 percent inflation target, underscoring the U.S. economy's resilience amidst recent disruptions.

Warsh addressed misconceptions regarding the Fed's inflation target, affirming that the committee's goal remains firmly at 2 percent without any implicit flexibility. He pointed out that while a rate increase could help manage high inflation, it would not be considered in isolation.

The Fed's economic assessment noted solid output, strong capital expenditure, and a steady labor market, though inflation remains above the target. During the meeting, three participants advocated for a quarter percentage point increase, reflecting diverse opinions within the committee. Warsh described the discussions as a "real family fight," highlighting the robust exchange of ideas as essential for effective policy-making.

The decision follows Trump's renewed appeals for lower interest rates, suggesting that the U.S. should aim for the lowest rates globally. Despite this pressure, the Fed maintained its current stance, prioritizing economic stability and inflation control.