Fed holds US interest rates steady as uncertainty over Trump's Iran deal remains

The Federal Reserve held US interest rates between 3.5% and 3.75% after Kevin Warsh's first meeting in charge of the central bank.

Fed governors were split on whether to keep rates steady or increase them in a bid to tame inflation, which has been pushed up by the US-Israel war in Iran.

US President Donald Trump pushed Warsh's predecessor , Jerome Powell, to cut interest rates, and made clear he expected Warsh to fulfill his demand for cuts.

But, with inflation running at an above-target 3.8%, and uncertainty surrounding Trump's deal to end the war with Iran, the Fed's rate-setting committee unanimously decided to kept rates steady.

In a statement backed by its 12 members, the Federal Open Market Committee (FOMC) said: "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."

The Fed's statement on Wednesday represented a marked change in the central bank's communication style, one of Warsh's key promises for his tenure.

He was a sharp critic of how the Fed has communicated its decisions in the past, arguing it should say less while getting on with the job.