The Central Bank of Bahrain (CBB) announced its decision to maintain the overnight deposit interest rate unchanged at 4.25 per cent.
This decision comes as part of the review conducted by the CBB to maintain monetary and financial stability in Bahrain in light of global financial market developments.
Meanwhile, the US Federal Reserve held interest rates steady yesterday and projected higher inflation, steady unemployment and only a single rate cut for the year as officials took stock of economic risks from the US and Israeli war with Iran.
New projections from US central bank policymakers showed the Fed’s benchmark overnight interest rate would fall by just a quarter of a percentage point by the end of this year, with no hint of the timing of such a move.
That view was unchanged from previous projections and remains out of step with President Donald Trump’s demand for a sharp drop in borrowing costs.
Inflation, as measured by the Fed’s preferred gauge, was expected to end the year at 2.7 per cent, not far below its current rate and higher than the 2.4pc projected in December, possible fallout from the spike in global oil prices that followed the start of the bombing campaign against Iran.
“Implications of developments in the Middle East for the US economy are uncertain,” the Fed said in a policy statement that also noted ongoing stable unemployment.
The new rate and economic projections showed the Fed, for now, largely looking through the oil shock, with policymakers still expecting to lower rates this year and anticipating inflation to be 2.2pc by the end of 2027, near the central bank’s 2pc target.
Notably, no policymakers saw rates needing to move higher by the end of this year, though one official anticipated a rate increase in 2027.
Economic growth was upgraded slightly, to 2.4pc for 2026 versus 2.3pc in December, and the unemployment rate projection was unchanged at 4.4pc.
Fed Governor Stephen Miran continued his string of dissents, voting against the decision to maintain the policy rate in the current 3.50pc-3.75pc range in favor of a rate cut.
The decision to hold the policy rate steady was widely expected in financial markets, but the projections provide fresh information about how the US central bank is assessing the economic impact of a war that has disrupted global oil markets.
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