Fed Holds Rates Steady, Powell Era Nears End

The US Federal Reserve kept interest rates unchanged for the third consecutive meeting, with chair Jerome Powell citing global risks including rising energy prices and supply chain disruptions as reasons for caution. The decision signals the Fed is not ready to hike further but is also not moving toward cuts yet. Policymakers are caught between two pressures: inflation that remains above target and the risk that more rate hikes could slow economic growth too sharply. Holding rates steady buys time to watch how the economy responds to previous increases. For India, the near-term read is cautiously positive. A steady Fed reduces pressure on the rupee and lowers the risk of capital outflows from Indian markets. However, elevated crude oil prices, flagged by the Fed itself as a global risk, continue to pose a challenge, since India imports most of its oil and higher prices widen the trade deficit and stoke domestic inflation. Powell is approaching the end of his tenure, adding some uncertainty about future Fed direction. Markets will watch closely for any signals on who leads the Fed next and whether policy priorities shift.