Fed pauses rates again as Middle East tensions risk hotter inflation

The Federal Reserve on Wednesday left its benchmark interest rate unchanged, maintaining a target range of 3.5% to 3.75% for a fifth consecutive meeting. Heading into the meeting, most monetary policy watchers had expected the Fed to stand pat after inflation cooled in June. Still, a minority (about 30%) had penciled in a hike, a mix described as unusual. The central bank made its decision amid cooling inflation numbers and a still-resilient job market. The Consumer Price Index (CPI) for June fell 0.4% on a seasonally adjusted basis, following a 0.5% rise in May, driven mainly by a 9.7% drop in gas prices when a now-defunct peace deal was signed by the U.S. and Iran. Meanwhile, the U.S. added 57,000 jobs in June, at a pace below expectations over the past few months. With Middle East tensions still ongoing, some experts believe recent oil price increases have yet to be reflected in inflation numbers. “When the war started, a lot of producers tried to bear some of the expense, and now it’s being passed on to the consumers — it’s much harder once you raise prices to pull them back down,” said Melissa Cohn, regional vice president at William Raveis Mortgage. The Federal Open Market Co...