The Federal Reserve kept the target range for the federal funds rate unchanged at 3.5% to 3.75%. The Hong Kong Monetary Authority (HKMA) said the Fed's decision to hold rates steady was in line with market expectations. The market generally believes there is considerable uncertainty over the future direction of US monetary policy, which will depend on inflation trends and labor market conditions. In particular, persistent tensions in the Middle East have kept oil prices elevated, and their impact on US inflation remains to be observed.