The U.S. Federal Reserve kept its benchmark interest rate unchanged at 3.5–3.75 percent on Wednesday in an 11–1 vote, in line with market expectations, while warning that uncertainty over the economic outlook remains elevated.
The central bank reiterated its dual mandate of achieving maximum employment and bringing inflation down to its long-term target of 2 percent.
Policymakers also pointed to geopolitical risks, noting that developments in the Middle East could have uncertain implications for the U.S. economy.
Markets reacted with a decline in precious metals. Gold prices fell below the $4,900 level for the first time since January 21, dropping around 2.45 percent on the day to trade near $4,885 per ounce by 1815 GMT. The metal had reached a record high close to $5,600 in January.
Silver prices also declined, falling 2.8 percent to $77 per ounce.
The Fed had cut rates by 25 basis points in December 2025 but opted to pause in January and again this week.
While earlier expectations pointed to continued rate cuts, rising inflationary pressures linked to the conflict involving the United States, Israel and Iran have shifted market expectations toward a more cautious policy stance.
