The US Federal Reserve held its benchmark interest rate at 3.5%, 3.75% on 29 April, marking the third consecutive meeting without a change. The decision was widely expected, so markets saw no immediate shock from the announcement. The Fed cited increased risk of inflation rising, driven by higher global energy prices, as a key reason to stay cautious. Holding rates steady is a way of keeping borrowing costs stable while watching how price pressures develop. Higher energy prices can push up inflation broadly, from transport to manufacturing, which gives the Fed reason to avoid cutting rates too soon. For borrowers, this means loan and mortgage rates stay elevated for longer. For investors, it signals the Fed is not ready to ease financial conditions yet. The next move will depend heavily on whether energy-driven inflation pressures build further or begin to ease.
US inflation hit 4.1% in May 2026, its highest level in three years, driven by rising energy prices, keeping a Federal Reserve rate hike in September firmly on the table. Consumer spending rose on tax refunds and a stock market rally, while business investment in AI equipment also rebounded.
RBI data through May 2026 shows that its 85 basis point repo rate cuts since February 2025 are only partially reaching borrowers, with lending rate transmission described as moderated. Slower pass-through limits relief for loan holders and may pressure the RBI to cut rates further to achieve its growth goals.
U.S. consumer prices rose at a 4.2% annual rate in May, the fastest pace in three years, driven by a spike in energy costs. The reading puts pressure on the Federal Reserve to respond, with potential knock-on effects for interest rates, borrowing costs, and household purchasing power.
US inflation rose to a three-year high in May, driven by surging gas and energy prices tied to the Middle East conflict. The reading complicates the Federal Reserve's path toward cutting interest rates and keeps pressure on household budgets.
