U.S. Fed holds interest rate steady

The U.S. Federal Reserve on Wednesday kept the target range for the federal funds rate unchanged at 3.5-3.75 percent.

"Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little," said the Federal Open Market Committee (FOMC) in a statement.

Meanwhile, "inflation remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy," the FOMC went on in the statement.

In support of the Fed's dual mandate, the committee "decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent," the statement said.

The FOMC reaffirmed "its policy of maintaining ample reserves in the banking system."

All 12 FOMC members voted for keeping the rate unchanged.

Following the FOMC meeting held on Tuesday and Wednesday, meeting participants submitted their projections of the most likely outcomes for real GDP growth, the unemployment rate, and inflation for each year from 2026 to 2028 and over the longer run.

The Federal Reserve Board members and Federal Reserve Bank presidents project that U.S. median GDP growth will be 2.2 percent in 2026, lower than the March projection of 2.4 percent. The median unemployment rate will be 4.3 percent in 2026, down from the March projection of 4.4 percent. Their GDP growth and unemployment projections for 2027 are at 2.3 percent and 4.3 percent, respectively, unchanged from the March projection.

As for inflation based on the personal consumption expenditures price index, FOMC meeting participants project it at 3.6 percent for 2026 and 2.3 percent for 2027, both higher than the March projections of 2.7 percent and 2.2 percent, respectively.

U.S. Fed holds interest rate steady

The International Energy Agency (IEA) said on Wednesday that oil reserves in members of the Organisation for Economic Co-operation and Development (OECD) had fallen by a cumulative 163 million barrels since the outbreak of the Middle East conflict, reaching their lowest level since December 1990.

According to the IEA's latest Monthly Oil Report, global observed oil stocks have fallen by an average of 3.8 million barrels per day (mb/d) since the start of the Middle East conflict, including a draw of 143 million barrels in May, mainly due to accelerated releases of emergency stocks.

The report said the memorandum of understanding due to be signed by the United States and Iran this week was an important step toward easing regional tensions and could pave the way for reopening the Strait of Hormuz and lifting the U.S. blockade on Iranian oil traffic.

The IEA forecast global oil supply to fall by an average of 3.9 mb/d in 2026 to 102.4 mb/d, before rising by 8 mb/d in 2027 to 110.3 mb/d. However, unresolved issues, including mine clearance in the Strait of Hormuz and transit arrangements, mean operational and political risks could still weigh on the pace of supply recovery.

The agency said a significant supply overhang could emerge next year. Global oil demand is projected to rise by a relatively modest 2 mb/d to 105.3 mb/d, while supply is expected to increase by about 8 mb/d to 110.3 mb/d.

The surplus could ease market pressures and allow countries to replenish depleted inventories or build strategic reserves as they reassess energy policies in response to the crisis, the IEA said.

IEA says OECD oil stocks fall to lowest since 1990