By Ronnie Harui and Kimberley Kao
Asian equities were broadly lower and oil futures were volatile on Thursday as investors digested the Federal Reserve's decision to hold interest rates steady against a backdrop of ongoing tensions in the Middle East.
The Federal Open Market Committee voted 9-3 to leave rates unchanged at the end of its two-day meeting Wednesday. Fed Chairman Kevin Warsh refrained from offering signals at a post-meeting press conference regarding what might prompt the central bank to hike rates to combat U.S. inflation, which has remained above 2% for the last five years.
"Chair Warsh will eventually need to match his hawkish rhetoric with policy action or risk undermining his inflation-fighting credibility," said Carol Kong, strategist at Commonwealth Bank of Australia.
"The longer the FOMC keeps the Funds rate unchanged while inflation stays elevated, the greater the risk that markets question the Fed's commitment," Kong said.
