Washington: The U.S. Federal Reserve on Wednesday decided to maintain its benchmark interest rate for the third consecutive time, citing ongoing inflation concerns and heightened economic uncertainty resulting from the Middle East conflict. The decision to keep the rate within the 3.5-3.75 percent range was made during the Federal Open Market Committee (FOMC) meeting, possibly marking the last such meeting under Fed Chair Jerome Powell, whose term expires on May 15.

According to Yonhap News Agency, the Federal Reserve highlighted that inflation remains "elevated," partly due to recent increases in global energy prices. The central bank expressed concerns about the economic outlook, noting that developments in the Middle East are contributing to a "high level of uncertainty." This decision comes as U.S. consumer prices experienced a significant rise of 3.3 percent in March compared to the previous year, representing the largest annual increase since May 2024.

The pause in rate adjustments has resulted in a gap of up to 1.25 percentage points between the key rates of South Korea and the United States. Meanwhile, oil prices have surged, further influencing the economic landscape amidst the ongoing conflict in the Middle East.

As Jerome Powell's term as Fed chair approaches its end, the Senate is currently undergoing a confirmation process for Kevin Warsh, nominated by President Donald Trump, to succeed him. Powell will continue to serve as a Fed governor until January 2028.