THE Central Bank of Bahrain (CBB) announced its decision yesterday 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.
The Federal Reserve, meanwhile, held interest rates steady yesterday, a choice that may intensify questions about how US central bank chief Kevin Warsh will deliver on his commitment to bring inflation back down to the 2pc target.
The widely expected decision to leave the benchmark interest rate in the 3.50pc-3.75pc range drew dissents from three of the 12 members of the policy-setting Federal Open Market Committee who ‘preferred’ a quarter-percentage-point hike at this meeting. Those same three, the presidents of the Fed’s Cleveland, Dallas and Minneapolis regional banks, had also dissented at Jerome Powell’s final meeting as central bank chief in late April, that time in favor of removing the implied promise of lower rates.
Warsh, who took over as head of the Fed in May, has said he has “no tolerance” for inflation that has been running above the central bank’s target for more than five years, and up until last month was accelerating as the war in the Middle East pushed up global fuel and food prices, and investment in data centers and other spending tied to artificial intelligence drove up demand.
“Inflation remains elevated relative to the Committee’s 2pc goal,” the Fed said in a short policy statement after the end of its latest two-day meeting.
It replicated word for word all of the June 17 statement’s assessment of the economy.
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