US Federal Reserve leaves interest rates unchanged for fifth straight meeting

Dubai: The US Federal Reserve left interest rates unchanged on Wednesday, even as inflation and energy prices remained elevated in the world's largest economy.

Most investors expected the Fed to hold rates at 3.50-3.75 per cent for the fifth straight meeting, according to CME's FedWatch monitoring tool - but bets on a rate-hike have been rising.

Consumer inflation in the US eased to 3.5 percent year-on-year last month, but is expected to rise again on the back of seesawing oil prices from Trump's war on Iran, which saw renewed fighting in recent weeks.

US inflation has been stuck above the central bank's 2% target for more than five years. The Iran war has generated uncertainty over the economic outlook, creating a quandary for Fed policymakers.

Analysts noted how Federal Reserve policymakers have been losing patience with inflation, while flagging that they may not be ready to turn their frustration into action -- not this week anyway.

Most Wall Street traders expect the Fed to hike rates at its next meeting in mid-September.