Fed holds rates steady
The Federal Reserve left interest rates unchanged at its March meeting, citing a “high degree of uncertainty” from the war in Iran and related energy risks — and now projects just one rate cut in 2026. Markets are jittery as policymakers signal caution, underscoring that the Fed sees disinflation risks but wants to avoid being blindsided by commodity shocks. (cnbc.com) (nytimes.com)
The FOMC vote split was 11–1, with Governor Stephen I. Miran casting the sole dissent in favor of lowering the target range by a quarter percentage point. (cnbc.com) The committee’s median “dot” for the federal funds rate at the end of 2026 sits at 3.4%, and the distribution of dots shifted toward fewer cuts compared with the December projections. (prod-i.a.dj.com) Policymakers raised their 2026 PCE inflation projection to 2.7% and core PCE to 2.7%, up from 2.4% and 2.5% in December, while lifting the GDP forecast for 2026 to 2.4% and keeping the year‑end unemployment projection at 4.4%. (prod-i.a.dj.com) Chair Jerome Powell described the latest forecasts as “a bit of a shot in the dark” because the Iran war has added a “high degree of uncertainty,” and he warned that surging oil can disrupt inflation expectations. (federalreserve.gov) Markets reacted immediately: U.S. indices slid (the Dow dropped roughly 750 points on the day) while Brent and WTI crude jumped above $100 a barrel after attacks on Gulf energy facilities. (barrons.com) Pricing in fed‑funds futures tightened toward a slimmer path for cuts, and several fixed‑income desks reported that traders were no longer pricing any chance of a Fed cut in 2026 after the meeting. (investing.com)
