KATHMANDU. The U. S. central bank, the Federal Reserve, is likely to keep interest rates unchanged at its next meeting, which analysts see as linked to the current economic and geopolitical situation.

Currently, the interest rate is in the range of 3.50 percent to 3.75 percent and is expected to remain unchanged. The main reason for this is the ongoing war in the Middle East, which has affected global oil supplies. The rise in fuel and energy prices, in particular, has increased the cost of production, transportation costs, and the price of daily essentials in the US, which has put additional pressure on inflation.

Currently, inflation in the US has reached 3.3 percent, which is considered to be the highest level in the last two years. The main objective of the Federal Reserve is to maintain price stability and keep the job market in balance. But in the current situation, it is difficult to balance these two goals, because on the one hand, there is a need for a tight monetary policy to control inflation, and on the other hand, there is pressure to make policies that do not affect economic growth and employment.

According to experts, not only the energy crisis, but also supply chain disruptions are helping to keep prices high. This has increased the likelihood of reducing consumer spending and adding cost pressure to businesses. This is why the Fed is unlikely to cut interest rates immediately.

Fed officials are also adopting a ‘wait and see’ strategy at the moment, as the impact of the war is not yet fully clear. Some policymakers have warned of increased long-term inflation risks, which also weakens the chances of future interest rate cuts.

At the same time, the Fed’s decision is also coming amid political pressure. US President Donald Trump is constantly pressuring to reduce interest rates, while the Fed’s independence and leadership change are also being debated. For all these reasons, the upcoming meeting has become important not only from an economic point of view but also from a political point of view.

The energy crisis, high inflation, job market uncertainty and political pressure make the Federal Reserve the strongest chance of keeping interest rates unchanged immediately, while the future direction remains uncertain.