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Fed Keeps US Interest Rates Steady as Inflation and Iran Deal Uncertainty Weigh on Outlook

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Fed Keeps US Interest Rates Steady as Inflation and Iran Deal Uncertainty Weigh on Outlook Federal Reserve decision holds rates firm The US Federal Reserve has decided to keep interest rates unchanged at 3.5% to 3.75% after its latest policy meeting led by new chair Kevin Warsh. The decision came as policymakers assessed ongoing inflation pressure and rising global uncertainty linked to tensions involving the US, Israel, and Iran. Inflation and global risks shape debate Inflation in the US remains above the central bank’s target at around 3.8%. This kept pressure on officials, some of whom supported a possible rate increase to control price growth. At the same time, uncertainty around President Donald Trump’s efforts to secure a deal to end the conflict with Iran added further caution to the outlook. The Fed said economic activity is still growing at a solid pace, even with these external risks. Split views inside the Fed Members of the Federal Open Market Committee showed disagreement on the next steps for interest rates. According to projections, nine of the 18 officials expect at least one rate increase this year. Eight expect rates to remain steady, while only one predicts a cut. This mix of views highlights the lack of agreement on how aggressively the Fed should respond to inflation. Policy message becomes shorter under Warsh The Fed also changed how it communicates policy decisions. The latest statement was much shorter than previous updates, reflecting Warsh’s push for simpler messaging. Officials removed earlier language that hinted at future rate cuts. The new statement focused mainly on price stability and current economic strength. Trump reacts to Fed stance President Donald Trump reacted briefly to the decision, saying it was acceptable and avoiding a strong position. He suggested that rate hikes would be harmful for the economy, but also expressed support for Kevin Warsh, saying he trusted his approach. Economic outlook remains uncertain While job growth and business investment remain steady, policymakers continue to face mixed signals. Inflation is still above target, and geopolitical tensions continue to cloud the outlook for future rate decisions.

Federal Reserve decision holds rates firm

The US Federal Reserve has decided to keep interest rates unchanged at 3.5% to 3.75% after its latest policy meeting led by new chair Kevin Warsh. The decision came as policymakers assessed ongoing inflation pressure and rising global uncertainty linked to tensions involving the US, Israel, and Iran.

Contents
Federal Reserve decision holds rates firmInflation and global risks shape debateSplit views inside the FedPolicy message becomes shorter under WarshTrump reacts to Fed stanceEconomic outlook remains uncertain

Inflation and global risks shape debate

Inflation in the US remains above the central bank’s target at around 3.8%. This kept pressure on officials, some of whom supported a possible rate increase to control price growth.

At the same time, uncertainty around President Donald Trump’s efforts to secure a deal to end the conflict with Iran added further caution to the outlook. The Fed said economic activity is still growing at a solid pace, even with these external risks.

Split views inside the Fed

Members of the Federal Open Market Committee showed disagreement on the next steps for interest rates. According to projections, nine of the 18 officials expect at least one rate increase this year. Eight expect rates to remain steady, while only one predicts a cut.

This mix of views highlights the lack of agreement on how aggressively the Fed should respond to inflation.

Policy message becomes shorter under Warsh

The Fed also changed how it communicates policy decisions. The latest statement was much shorter than previous updates, reflecting Warsh’s push for simpler messaging.

Officials removed earlier language that hinted at future rate cuts. The new statement focused mainly on price stability and current economic strength.

Trump reacts to Fed stance

President Donald Trump reacted briefly to the decision, saying it was acceptable and avoiding a strong position. He suggested that rate hikes would be harmful for the economy, but also expressed support for Kevin Warsh, saying he trusted his approach.

Economic outlook remains uncertain

While job growth and business investment remain steady, policymakers continue to face mixed signals. Inflation is still above target, and geopolitical tensions continue to cloud the outlook for future rate decisions.

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Previous Article AI will create more jobs, not replace workers, says Jeff Bezos AI will increase labour demand, Bezos says Amazon founder Jeff Bezos has said artificial intelligence will not replace large numbers of workers. Instead, he believes it will increase demand for human labour and create new types of jobs. Speaking at a tech conference in Paris, Bezos said fears about mass job losses are overstated. He argued that AI will remove limits on what people can do and open up fresh opportunities across industries. He said many people worry that AI will make workers unnecessary. However, he disagrees and believes the world may actually face a shortage of labour as new work emerges. Debate over AI and job security Bezos’ comments come at a time when concerns about AI’s impact on employment are growing. Some political and tech leaders, including former UK prime minister Rishi Sunak, have warned that AI could reduce job prospects, especially for younger workers. The UK’s Trades Union Congress has also raised concerns. It warned that AI could repeat the impact of deindustrialisation, where profits rise but many jobs become less secure or disappear. At the same time, it noted that AI could still bring major benefits if it is developed in a fair way and productivity gains are shared with workers. Bezos highlights physical AI and manufacturing Bezos also spoke about his new AI venture, Prometheus, which focuses on improving physical manufacturing. He said automation in this sector is growing quickly, but still needs human input and oversight. He suggested that AI will not fully replace industrial workers. Instead, it will reshape how production systems work and create demand for new skills. Long term vision for space and the Moon At the same event, Bezos shared his long term vision for space exploration. He described space as limited by supply rather than demand and said access is the main barrier to expansion. He said the Moon could become the first step in building a permanent human presence beyond Earth. Technologies like electrolysis could one day help extract and use lunar resources for fuel and long term missions. “We are going to the Moon to stay, not just to visit,” he said. Blue Origin updates and rocket setback Bezos also discussed his space company Blue Origin. He addressed a recent explosion during a ground test of the New Glenn rocket in Florida. No one was injured, but the incident damaged parts of the launch system. He said the team learned important lessons from the failure and managed to preserve key infrastructure, which will help speed up recovery. Blue Origin CEO Dave Limp said repairs are already underway. The company expects launches to resume before the end of the year as it competes with SpaceX in the commercial space race. AI will create more jobs, not replace workers, says Jeff Bezos
Next Article Inflation Holds at 2.8% as Food Price Rises Slow in UK Inflation stays unchanged despite earlier forecasts UK inflation stayed at 2.8% in May, according to the Office for National Statistics (ONS). Analysts had expected a rise to around 3%, but prices remained steady instead. Food price growth slowed during the month, helping balance increases in other areas such as transport and fuel. Experts had warned that global tensions, especially the Middle East conflict, could push prices higher. However, the latest peace deal between the US and Iran may reduce some of that pressure in the coming months. Transport costs drive inflation higher Transport prices continued to rise and remained the strongest contributor to inflation. Motor fuel prices were 24.6% higher than a year earlier. Overall transport inflation reached 6.8%, the highest level seen since December 2022. ONS chief economist Grant Fitzner said higher costs came mainly from airfares, vehicle taxes, and fuel prices. Food inflation slows to a 17-month low Food prices rose at a slower pace compared to previous months. Food inflation dropped from 3% in April to 2.2% in May, its lowest level since December 2024. Prices for meat, dairy, and vegetables increased, but at a reduced rate. Beef and veal prices still rose by 9.4% over the year. However, this was lower than the 13.2% rise in April and 18.8% in March, showing a clear slowdown. Retailers and food industry outlook The British Retail Consortium said lower food inflation reflects strong competition among supermarkets. Still, it warned that prices could rise again later in the year. The Food and Drink Federation said retail prices often lag behind production costs. It added that recent global disruptions, including issues around the Strait of Hormuz, have not yet fully affected shop prices. Chief executive Karen Betts explained that farmers, processors, and manufacturers face higher costs first, and these usually reach consumers after several months. Long term contracts for energy and ingredients also delay price changes. Inflation trend context Inflation has moved sharply over recent years. It fell close to zero in late 2020, then surged to 11.1% in October 2022. It later dropped to 1.7% in September 2024 before rising again to 2.8% in May 2026. Inflation Holds at 2.8% as Food Price Rises Slow in UK

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Candy Stores Are Growing in NYC Despite Economic Pressure Why small sweet shops are expanding during tough times New candy shops are appearing across New York City even though many retailers are struggling due to weak consumer confidence and ongoing inflation. While people are cutting back on larger purchases, demand for small treats like candy remains steady. Industry owners say sweets continue to sell because they are affordable and offer quick comfort. Even during financial stress, customers still want small indulgences they can easily justify. A business model that survived the Great Depression One of the strongest examples is Economy Candy on Manhattan’s Lower East Side. It first opened in 1937 during the tail end of the Great Depression and is now known as the city’s oldest candy store. The shop did not start as a candy store. It began as a hat and shoe repair business, with candy sold outside on a small cart to earn extra income. Over time, repairs became less affordable for customers, so the family shifted fully to sweets. That decision helped the business survive, and it is still running today under third generation ownership. Why candy still sells in uncertain times Owner Mitchell Cohen says people still buy candy even when money feels tight. He explains that inflation and uncertainty reduce spending power, but candy remains an easy and low cost purchase. Recent retail data shows overall US sales are still rising, yet consumer sentiment has dropped to record lows. This gap reflects a split between what people feel and what they still spend on. Experts say candy fits into a pattern often called the “lipstick effect.” When budgets shrink, people avoid expensive items but still buy small luxuries that give emotional comfort. New shops are betting on small treats This trend is also attracting new entrepreneurs. Kate Bolger, a former movie producer, is preparing to open The Village Confectionery in Sleepy Hollow, a town near New York City known for its literary history. Bolger believes customers may delay big purchases but will still spend on small treats like candy. She sees it as a simple way for people to enjoy something small without financial strain. A small luxury that stays resilient Even as the wider retail sector faces pressure, candy stores continue to grow in select areas. Their success is linked to low prices, emotional appeal, and steady demand during uncertain economic conditions.
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Deputy Mayor Defends Blocking £25m Palantir Met Police Contract Amid Job Cut Fears Contract decision sparks debate over policing costs and reforms in London London’s deputy mayor for policing and crime, Kaya Comer Schwartz, has defended her decision to stop a £25.3 million contract between the Metropolitan Police and US tech company Palantir. The deal was planned for 2026 to 2027 and included an optional extra year. It was intended to improve criminal investigations and support internal reforms within the force. She told the London Assembly’s Police and Crime Committee that her priority was ensuring public money is spent properly. She said the decision was based on concerns about value for money and accountability. “I make no apologies for making sure we have the right oversight over significant spending,” she said. “We must ensure contracts deliver value for Londoners.” Concerns over procurement and supplier choice The Mayor’s Office for Policing and Crime raised concerns about how the Met Police handled the procurement process. It said the force engaged seriously with only one supplier during the process. It also noted concerns about the company’s values and ethics, although those issues could not legally determine the final decision. Palantir rejected the criticism. The company said its proposal offered strong value for money and supported ongoing policing needs. It also confirmed it was considering legal action to challenge the decision. Impact on policing and possible job losses Met Police Commissioner Sir Mark Rowley warned that the blocked deal could affect staffing plans. He said the force must make budget savings this year and next year, which may lead to difficult decisions affecting public services. He said up to 750 job cuts could be required if funding pressures continue. Those decisions are expected to be finalised in the coming weeks. Conservative Assembly member Susan Hall criticised the decision. She warned it could lead to further cuts in frontline policing and questioned whether the deputy mayor would accept responsibility for the impact. Oversight and unanswered questions During the committee session, Liberal Democrat member Gareth Roberts asked how much detail the deputy mayor had seen about potential cutbacks. Comer Schwartz said she had not yet reviewed a full contingency plan. She added that discussions with the Met were still ongoing. Officials continue to assess how the funding gap will be managed while balancing technology investment, staffing levels, and service delivery across London policing.
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Inflation Holds at 2.8% as Food Price Rises Slow in UK Inflation stays unchanged despite earlier forecasts UK inflation stayed at 2.8% in May, according to the Office for National Statistics (ONS). Analysts had expected a rise to around 3%, but prices remained steady instead. Food price growth slowed during the month, helping balance increases in other areas such as transport and fuel. Experts had warned that global tensions, especially the Middle East conflict, could push prices higher. However, the latest peace deal between the US and Iran may reduce some of that pressure in the coming months. Transport costs drive inflation higher Transport prices continued to rise and remained the strongest contributor to inflation. Motor fuel prices were 24.6% higher than a year earlier. Overall transport inflation reached 6.8%, the highest level seen since December 2022. ONS chief economist Grant Fitzner said higher costs came mainly from airfares, vehicle taxes, and fuel prices. Food inflation slows to a 17-month low Food prices rose at a slower pace compared to previous months. Food inflation dropped from 3% in April to 2.2% in May, its lowest level since December 2024. Prices for meat, dairy, and vegetables increased, but at a reduced rate. Beef and veal prices still rose by 9.4% over the year. However, this was lower than the 13.2% rise in April and 18.8% in March, showing a clear slowdown. Retailers and food industry outlook The British Retail Consortium said lower food inflation reflects strong competition among supermarkets. Still, it warned that prices could rise again later in the year. The Food and Drink Federation said retail prices often lag behind production costs. It added that recent global disruptions, including issues around the Strait of Hormuz, have not yet fully affected shop prices. Chief executive Karen Betts explained that farmers, processors, and manufacturers face higher costs first, and these usually reach consumers after several months. Long term contracts for energy and ingredients also delay price changes. Inflation trend context Inflation has moved sharply over recent years. It fell close to zero in late 2020, then surged to 11.1% in October 2022. It later dropped to 1.7% in September 2024 before rising again to 2.8% in May 2026.
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