Federal Reserve and RBI keep rates steady as Middle East conflict rattles markets

Federal Reserve RBI rate decision Middle East conflict oil prices

The U.S. Federal Reserve is expected to leave its policy rate unchanged at 3.50‑3.75 %, with market odds of a 0.25 percentage‑point hike this week rising to about 38 % after oil prices surged amid an escalation in the U.S.–Iran conflict. New Fed chair Kevin Warsh faces pressure to act, while analysts note that higher energy costs could reignite inflation concerns.

India’s Reserve Bank of India also announced it will keep its repo rate at 5.25 % through the rest of 2026, citing the adverse impact of the Middle‑East war on growth and a still‑weakening rupee. Only a minority of economists surveyed expect a rate hike unless oil prices stay above $90 a barrel.

In Europe, the Bank of England and the Bank of Japan are widely expected to maintain their rates, adding to a week crowded with central‑bank decisions that investors are watching closely for policy language. Market participants are also reacting to falling oil prices after a brief pause in U.S.–Iran hostilities, which lifted equity futures and gold while easing risk‑off sentiment.

The combined agenda underscores how geopolitical tensions and commodity price swings are shaping expectations for monetary policy across major economies.

Entities

Bank of England · Bank of Japan · CME Group · CME Group FedWatch tool · Christian Lie · DNB · Federal Reserve · Federal Reserve Board (Fed) · Formue · Jerome Powell · Kevin Warsh · Kjersti Haugland

Claims

What the coverage asserts, and how many sources carry each claim.

[● 3 SOURCES] Recent oil‑price spikes and Middle‑East tensions have heightened inflation concerns. www.vg.no · e24.no · gentosha-go.com
[● 3 SOURCES] Analysts expect the Federal Reserve to keep rates unchanged at the July meeting. gentosha-go.com · global-view.com · www.vg.no
[● 3 SOURCES] The Federal Reserve’s target range for the federal‑funds rate is 3.50 %–3.75 %. gentosha-go.com · www.vg.no
[● 2 SOURCES] The two‑year U.S. Treasury yield is around 4.25 %. www.vg.no
[● 2 SOURCES] The Bank of England and the Bank of Japan are also holding policy meetings this week and are expected to keep rates steady. www.vg.no · e24.no
[● 4 SOURCES] Market assigns roughly 33‑38 % probability of a Federal Reserve rate hike at the July meeting. www.vg.no · e24.no · gentosha-go.com
[● 2 SOURCES] U.S. PCE inflation data are expected to fall to about 3.7 % headline and 3.3 % core. www.vg.no · e24.no
[● 3 SOURCES] Escalation of the Middle‑East conflict has pushed oil prices higher, influencing market expectations for U.S. monetary policy. www.vg.no · e24.no · global-view.com
[● 3 SOURCES] Market participants price over 33% chance of a Fed rate hike at the upcoming July meeting. www.vg.no · global-view.com
[● 2 SOURCES] Probability of a Fed rate hike rose from about 13% a week ago to roughly 38% after oil price surge and Middle‑East tension. www.vg.no · e24.no
[● 2 SOURCES] June U.S. PCE headline inflation is expected to fall from 4.1% to 3.7%, with core inflation around 3.3%. www.vg.no · e24.no
[● 3 SOURCES] The Bank of England and the Bank of Japan are expected to keep their policy rates unchanged in upcoming meetings. www.vg.no · e24.no · global-view.com