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The U.S. Federal Reserve has decided to keep its benchmark interest rate unchanged amid persistent inflation pressures, as announced on July 25. The move reflects a cautious approach to balancing inflation control with economic growth support. Analysts note the decision aligns with similar monetary policies in other major economies.
The Federal Reserve held interest rates at 3.5-3.75% on July 30, citing persistent inflation partly driven by energy price spikes linked to U.S.-Iran tensions. Chair Kevin Warsh's decision to scrap forward guidance has made policy less predictable, with three committee members dissenting and voting for a hike.
Gold prices have plunged from a January peak despite rising geopolitical tensions. High inflation and prospects of a Federal Reserve rate hike are driving the decline. Strong U.S. dollar demand is also weighing on the precious metal.
