U.S. Fed keeps interest rate unchanged amid high energy prices

The U.S. Federal Reserve on Wednesday decided to maintain its target range for the federal funds rate unchanged at 3.5-3.75 percent as high energy prices added inflation pressures.

This is the Fed's third straight rate hold this year, matching market expectations.

The fragile and frequently violated ceasefire in Lebanon is coming under mounting strain amid rising political and military pressures across the Middle East, according to Daniel Levy, a former senior adviser to Israeli Prime Minister Ehud Barak.

In an interview aired on Wednesday by China Global Television Network (CGTN), Levy said tensions remain high, with clashes continuing, despite an extension of a ceasefire, with developments on other fronts in the region likely to determine whether hostilities between Israel and Hezbollah forces in Lebanon fully resume.

"Partly, that depends on whether the U.S. allows Israel sufficient destructive freedom of operation, that if Iran conditions one deal on another, it brings the whole thing crumbling down. So, in order to uphold this ceasefire, America has imposed certain limitations on Israel's actions in Lebanon. However, first of all, the reverse probably applies. If there is a collapse and a further escalation on the Iran front, one can almost guarantee that Israel will re-escalate in Lebanon," said Levy, who is now president of the U.S./Middle East Project, which focuses on solutions to the Israeli-Palestinian conflict.

A major conflict between Israel has and Hezbollah ignited in early March, with Israel sending troops into south Lebanon to battle the Iran-backed militant group which had launched rocket attacks at Israel following joint Israeli-U.S. strikes on Iran.

A 10-day ceasefire took effect on April 17 and was extended by three weeks on April 23, after U.S. President Donald Trump announced the extension shortly after the two sides held their second round of ambassador-level talks in the U.S.

"There are now Israel-Lebanon negotiations taking place, hosted, sponsored, by the U.S. One of the things to look out for is the framework of that negotiation, is the content of that negotiation, designed to achieve a mutually dignified, pragmatic, sustainable deal, or are the Americans and the Israelis trying to push things into that deal equation which reality cannot sustain? So you have a Lebanese government which wants to move forward, but is being pushed into a civil war," he said.

Despite the ceasefire, the violence continues with both sides blaming each other for violations of the truce.

Lebanon's health ministry said Israeli strikes on Tuesday killed eight people, including three rescue workers, in the country's south.