The Federal Reserve held interest rates steady at its first meeting of the year, while tensions escalated between the United States and Iran over the latter's nuclear program. The Fed's decision, announced Wednesday, maintained rates in a range of 3.5 percent to 3.75 percent, following three reductions in late 2025, according to The New York Times. Meanwhile, President Trump warned Iran that "time is running out" to negotiate a deal on its nuclear program, as a large U.S. naval fleet amassed in the Gulf, the BBC reported.
The Federal Reserve cited an expanding U.S. economy and signs of stabilization in the job market as reasons for holding rates steady, The New York Times noted. Most of the members of the Fed's 12-member committee voted to keep rates unchanged. However, Stephen I. Miran, a Trump appointee, dissented and voted for a quarter-point cut, as did Christopher J. Waller, a Fed governor and contender for the next Fed chair.
In the Middle East, the U.S. military buildup, which includes the aircraft carrier USS Abraham Lincoln, prompted a strong response from Iran. Foreign Minister Abbas Araghchi stated that Iran's armed forces were ready "with their fingers on the trigger" to "immediately and powerfully respond" to any aggression, according to the BBC. President Trump described the U.S. naval fleet as a "massive Armada" that was "moving quickly, with great power, enthusiasm, and purpose" towards Iran. Iran insists its nuclear program is for peaceful purposes.
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