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Equity indexes flatten after volatile session

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Fed signals slower easing, predicts more inflation

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Oil rises on sixth day of Israel-Iran tension

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Trump says "anything could happen"

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US Treasury yields fall, then rise

(Updates asset prices at 4:45pm ET)

By Isla Binnie

NEW YORK, June 18 (Reuters) - Major Wall Street indexes

ended a choppy trading session little changed after the U.S.

central bank held interest rates steady on Wednesday, while the

six-day-old Israel-Iran air war kept oil prices climbing on

fears of escalation and supply disruption.

In a much-anticipated address, Federal Reserve Chair Jerome

Powell said the Fed expects goods prices for U.S. consumers to

go up over the course of the summer under pressure from

President Donald Trump's tariffs.

The Fed's update earlier in the day signalled borrowing

costs were still likely to fall this year, but that future cuts

would proceed a little more slowly.

Powell has insisted the Fed's moves are based on data.

He cautioned on Wednesday not to place too much stock in the

forecasts, which could change as more readings come in.

"Powell by design left optionality open," said David

Seif, chief economist for Developed Markets at Nomura in New

York, adding that the chair "was saying we don't know what the

impact of the tariffs is going to be. That seems like a fair

statement when you've had the largest increase in tariffs that

the U.S. has seen in 95 years."

The Dow Jones Industrial Average ended 0.10%

lower on the day, the S&P 500 fell 0.03% and the Nasdaq

Composite rose 0.13%.

Stocks were solidly higher before the Fed statement.

Geopolitics remained in focus as Iranian Supreme Leader

Ayatollah Ali Khamenei rejected Trump's demand for unconditional

surrender, and Trump said his patience had run out but did not

indicate his next step.

Trump declined to say whether he had made any decision on

whether to join Israel's bombing campaign against archenemy

Iran. Asked if he thought the Iranian government could fall,

Trump said: "Sure, anything could happen."

Brent crude futures settled 25 cents higher at

$76.70 a barrel. U.S. West Texas Intermediate crude rose

30 cents to $75.14. Earlier in the session, prices had been down

around 2%. On Tuesday, prices jumped over 4%.

U.S. GOVERNMENT DEBT COSTS RISE AFTER POWELL

U.S. Treasury yields pared earlier declines after Powell

forecast accelerating inflation.

The yield on benchmark U.S. 10-year notes was

4.391%, the same as its level late on Tuesday.

Concerns the United States will join the Israel-Iran

conflict had boosted demand for safe-haven U.S. debt and helped

send yields lower earlier on Wednesday.

Those yields surged on April 2 after Trump announced

higher-than-expected tariffs, prompting concerns foreign

investors would move away from U.S. assets. They stabilised in

the ensuing weeks as the president delayed implementing the

levies.

Economic data from earlier in the week had made for a

challenging backdrop to the Fed decision.

U.S. retail sales fell by a larger-than-expected 0.9% in

May, data showed on Tuesday, the biggest drop in four months.

Further data on Wednesday showed the number of Americans

filing new applications for unemployment benefits fell last week

but stayed at levels consistent with a loss of labor market

momentum in June.

The yield on the rate-sensitive 2-year note fell

1.1 basis points to 3.939%, from 3.95% late on Tuesday.

Markets are closed on Thursday for the federal Juneteenth

holiday.