While the Iran-Israel war conflict remains the main focus in the market, the focus briefly shifted to the results of the FOMC meeting early this morning.
In line with expectations, the Federal Reserve (Fed) kept interest rates unchanged at 4.50% amid a still-uncertain market environment and ongoing tariff pressure.
FOMC members remain on the lookout for a 50 basis point cut in 2025, with two more rate cuts expected by the end of the year.
The Fed updated its economic outlook with a decline in economic growth (GDP) to 1.4% this year, down from 1.7% previously.
The unemployment rate in the United States is forecast to rise to 4.5% by the end of 2025 from 4.4% previously, and the outlook for 2026 remains at 4.5%.
Lastly, the PCE inflation forecast rose to 3% for the end of 2025 from 2.7%. In 2025, inflation is expected to decline to 2.4% and next year is expected to reach 2.1%.
The Fed also sees the risk of tension in the Middle East that could affect global markets.
Concerns about the surge in crude oil prices to $150 per barrel could affect tariffs and drive up inflation.
Therefore, the Fed still maintains a wait-and-see approach before making policy changes with more confidence.
The US dollar traded stronger at the close of the New York session after reacting to a depreciation in value during the FOMC meeting results.
After the Fed, the policy meetings for the Swiss National Bank (SNB) and the Bank of England (BOE) will follow today (Thursday).
Next, heading into trading towards the end of this week, the market focus is expected to shift back to the developments in the Iran-Israel war.
