The Fed is keeping interest rates steady due to uncertainty surrounding the war in Iran.

WashingtonThe Fed's first meeting since the start of the Iran-Contra affair concluded with interest rates frozen at around 3.5% to 3.75%. The closure of the Strait of Hormuz and the rise in oil prices have given the head of the US central bank, Jerome Powell, further reason to keep rates at the same level. Powell, whose term is about to expire, seems determined to resist pressure from Donald Trump to lower rates. He is also mindful that just last weekA judge dismissed the Republican's criminal investigation against PowellThis underscores the harassment campaign it is suffering at the hands of the US government.

"Uncertainty about the economic outlook remains high. The implications of developments in the Middle East for the US economy are uncertain. The Committee is mindful of the risks on both sides of its dual mandate," the Board of Governors emphasized in its decision.

This is the second consecutive time the central bank has opted to keep interest rates in the same range, after 2026 began with rising inflation and declining hiring. Following the cuts at the end of 2025, Powell again applied the brakes in light of macroeconomic data that appeared to be stabilizing, but which called for caution. The latest data published by the Labor Department in February sent another warning: a total of 92,000 jobs were lost, a net negative figure and worse than the 50,000 jobs created by analysts. The unemployment rate also rose by one-tenth of a percentage point to 4.4%.

The Fed meeting also coincided with one of the worst days for oil prices on the world market since the United States and Israel attacked Iran. On Wednesday, oil and natural gas prices soared after Tehran reported that the bombings had affected the South Pars petrochemical facilities in southern Asaluyeh. The news has worried investors, who now fear that the regime will retaliate with an attack on other oil and gas facilities in the Gulf, which has driven the price of crude oil up to $110 a barrel.

The specter of Trump's pressure

Although Powell and a large number of governors continue to resist in order to maintain the Federal Reserve's independence, Trump's pressure has begun to affect the voting. The culture of near-unanimous consensus in decision-making has begun to crumble since the new governors appointed by the Republican took office. Over the past year, his three appointees have broken ranks with the majority, including two at the last Fed meeting. This week, it was expected that all three would again favor cutting rates. However, the pressure from the military campaign in the Middle East made itself felt, and the only dissenting vote came from Stephen Miran, who wanted a quarter-point cut.