US Fed holds interest rates steady as 'family fight' sees hawks call for hike

The U.S. Federal Reserve held interest rates steady on Wednesday, with Chair Kevin Warsh lauding a "family fight" that saw three policymakers dissent in calling for a rate hike to combat surging inflation.

U.S. households have been battered by years of high prices, and inflation has spiked on the back of President Donald Trump's war on Iran since March, with skyrocketing energy prices bleeding through into other products.

The Fed held rates at 3.50-3.75 percent for the fifth straight meeting, with Warsh denying that he was reticent to take action against high prices.

"We are on the job. We will deliver. We are focused like a laser, making sure we can do it," he said, adding that there was "no magic wand" with which the Fed could lower inflation quickly.

Warsh insisted the economy was showing "impressive resilience, with recent shocks."

The new Fed chair was nominated by Trump, who has exerted unprecedented pressure on the central bank to lower rates in a bid to turbocharge the economy, despite rising prices.

On Wednesday, Trump praised Warsh and claimed that the Fed chair would "love to see lower interest rates," adding without evidence that other board members were making decisions on a political basis.

AFP