Fed keeps rates steady as Iran conflict roils economy

The Federal Reserve held interest rates steady Wednesday as bankers stared down the evolving economic blowback from the war in Iran.

The Federal Open Market Committee (FOMC), the panel of bank officials responsible for setting borrowing costs, maintained its baseline interest rate at a range of 3.5 to 3.75 percent. 

FOMC officials voted 11-1 to keep rates unchanged, with only Fed board member Stephen Miran calling for a 0.25 percentage point cut.

Wall Street expected the Fed to hold fast even before the Middle East erupted after months of inconsistent job gains and little progress in bringing inflation down to a 2 percent annual rate, the Fed’s rough target for price growth.

Traders set the odds of the Fed not moving rates Wednesday at 99 percent, up from 93.6 percent one month ago, according to the CME FedWatch tool, which tracks options trades on Fed rate futures. 

The conflict in Iran has only made the Fed’s job more difficult and the outlook for the economy more uncertain, with little sign of military or diplomatic breakthrough on either side.

Iran’s throttling of the Strait of Hormuz has........

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