WASHINGTON, March 18, 2026, 14:29 (EDT)
- The Fed held the federal funds target range steady at 3.50% to 3.75%, maintaining its projection for a single quarter-point cut in its median outlook for this year.
- Officials bumped up their 2026 inflation outlook, now projecting both the Fed’s preferred price measure and the core rate at 2.7%. Unemployment stays at 4.4%, while their growth estimate edges higher to 2.4%.
- Governor Stephen Miran broke with the majority, pushing for a 25 basis-point cut now. Chair Jerome Powell’s remarks were scheduled for 2:30 p.m. EDT.
The Federal Reserve left rates unchanged Wednesday, sticking with its projection for a single quarter-point cut in 2026. Policymakers also raised their inflation forecast. The benchmark rate stays in the 3.50% to 3.75% band.
This comes as the Fed weighs whether a renewed oil spike and stronger pipeline inflation could leave price pressures stubbornly high, right when the job market is losing steam. U.S. producer prices jumped 0.7% in February, up 3.4% over the past year. Oil, now trading above $100 a barrel on war with Iran, complicates any timeline for policy easing.
The central bank noted in its statement that economic growth was solid, with job gains still subdued and inflation holding above target. Uncertainty about the outlook, officials said, remains high. Events in the Middle East, the statement added, could weigh on both employment and inflation goals.
The latest projections now have the personal consumption expenditures price index—what the Fed watches most closely—finishing 2026 at 2.7%. That’s higher than December’s 2.4%. Core PCE, which doesn’t include food and energy prices, is also pegged at 2.7%, up from the previous 2.5%. Growth ticks up to 2.4% from 2.3%, while unemployment stays at 4.4%.
The dot plot—the Fed’s internal chart mapping out each policymaker’s rate expectations—remained anchored at a year-end 3.4% policy rate. That lines up with just one quarter-point cut penciled in. But the division among officials was stark: seven anticipated holding steady, another seven projected a single cut, and the remaining five eyed at least two reductions.
Governor Stephen Miran broke ranks, pushing for a 25-basis-point rate cut right away. Powell, set to take the podium at 2:30 p.m. EDT, had investors watching closely for any hints on the Fed’s view of the recent oil price surge.
Stocks slipped in the afternoon session. The Dow dropped around 380 points. S&P 500 and Nasdaq each shed about 0.6%. Brent crude held above $108 a barrel, spotlighting energy’s renewed role in rate discussions.
Economists saw the tension coming. Diane Swonk, KPMG’s chief economist, described the forecasts ahead of the meeting as unfolding under a “cloud of uncertainty.” Thomas Ryan of Capital Economics pointed out there was “nothing in the price data” indicating the Fed would move to cut rates again soon. Over at EY, chief economist Gregory Daco called the Fed’s stance “wait-and-see,” noting rates are hovering near neutral—neither boosting nor slowing growth. Reuters
The danger is straightforward: persistent high crude could filter through to gas, freight, and consumer costs, possibly forcing the Fed to push back even its lone expected rate cut. If the fighting winds down and labor data softens more, calls for quicker easing could flare up again. Economists noted before the announcement that the outlook comes down to the war’s duration—and whether oil keeps running or slides back to pre-conflict prices.
It’s not just Washington on investors’ minds. The same surge in energy prices is moving through global markets, putting the focus on policy cues from the European Central Bank, Bank of England, and Swiss National Bank.
