Federal Reserve leaves US interest rate unchanged

In the wake of the Iran war, supply fears are driving up oil prices and triggering fears of inflation. Fuel prices in the USA have already risen sharply and threaten to increase inflation.

US President Donald Trump has repeatedly called on the independent monetary authorities led by Fed Chairman Jerome Powell to cut interest rates, most recently at the beginning of the week. But they decided against it again. Stock investors see increasingly slim chances of falling US interest rates this year due to inflation risks.

“An interest rate cut is effectively off the table for now,” says economist Lena Dräger from the Kiel Institute for the World Economy. Rather, the risk profile has shifted: If the oil price shock persists or intensifies, even a further tightening of monetary policy could no longer be ruled out.