The Federal Reserve maintained its policy rate on Wednesday while US wholesale inflation soared.
The Trump Administration also granted a waiver allowing foreign flagged vessels to carry fuel from one port to another in the United States to alleviate price pressures, and to deal with supply disruptions due to Iran’s conflict.
US Fed maintains rates amid global uncertainty
US Federal Reserve maintained interest rates at the same level, maintaining its cautious approach as they assessed the impact the Middle East Conflict and the mixed data in the US had on the economy.
Federal Open Market Committee (FOMC) voted by 11-1 in favour of keeping the benchmark interest rate at a level between 3.5% and 3.75%. Governor Stephen Miran was one of those voting against a cut.
Jerome Powell, Fed chair, acknowledged that near-term risks of inflation linked to the energy market are rising.
He said that “near-term inflation expectations” have increased in recent weeks. This is likely due to the significant rise in oil costs caused by supply disruptions across the Middle East.
The Fed’s official statement highlighted the uncertainty surrounding geopolitical events.
Officials said that the implications of the Middle East’s developments for the US economy were uncertain. The committee has a dual mandate and is aware of the potential risks.
The policymakers remained confident that they would cut rates in both 2026 and 2027. They avoided any indication of a rate increase this year.
Officials have noted that the unemployment rate has “little changed” in recent months, despite changes to language used in relation to labor markets.
Hot PPI data raises concerns over persistent inflation
The Fed is facing new challenges as the US wholesale inflation rate rose higher than anticipated in February.
Producer Price Index increased by 0.7% on a monthly basis, which was well over the forecast of 0.3%. The annual PPI also rose to its highest point in one year, at 3.4%.
The core PPI (excluding food and energy) also exceeded expectations with a 0.5% increase on the month, and a 3.9% rise year-on-year.
This increase is mainly due to higher service costs. These increased by 0.5%.
US relaxes fuel shipping regulations to stabilise supplies
The Trump administration, in response to the rising cost of energy and the disruptions to supply, announced that the Jones Act would be waived for 60 days, which will allow foreign flagged vessels to carry fuel and other cargo between US ports.
This move will ease the logistical restrictions caused by Iran’s conflict which has disrupted ship routes and pushed up gasoline prices.
White House spokesperson Karoline Lavitt said the move was “another measure to minimize the short-term disruptions in the oil markets as the US Military continues to meet the objectives of Operation Epic Fury.”
However, the waiver was criticized by industry groups. The American Maritime Partnership warned that it could harm US maritime jobs.
Analysts warned that fuel price increases may not be as significant as some analysts thought.
Strait of Hormuz is a major global energy chokepoint. It handles about a fifth of the world’s oil and gas flow.
Bitcoin slips as macro pressures trigger volatility
Bitcoin was under pressure. It fell 4.8%, to $71,070. This came amid a wider market decline following inflation data.
The market volatility is a result of a mix of macroeconomic insecurity, increasing oil prices and geopolitical tensions related to the Iran Conflict.
Technical indicators indicate that Bitcoin is still in an uptrend on a short term basis, supported by moving averages. However, traders will be closely monitoring critical support levels, between $71,275 and $70,250.
As the price approached $75,000, over 48,000 BTC were moved onto exchanges.
The bid absorbtion during the recent falls indicates that demand is still at low levels. This raises the possibility of a near-term stabilizer.
The post Evening Digest: US relaxes shipping regulations, Bitcoin drops below $72K can be updated as new developments unfold.
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