Fed holds rates steady
The Federal Reserve left the federal funds rate at 3.50%–3.75% and signaled only one cut penciled in for 2026 — Chair Powell stressed flexibility as energy shocks from the Middle East cloud the outlook. Markets pushed 2‑year yields higher and stocks slipped on a “higher‑for‑longer” vibe as the dot plot showed policymakers split on the path forward. (finance.yahoo.com)
The FOMC vote was 11–1, with Governor Stephen Miran the lone dissenter who favored a quarter‑percentage‑point cut at the March meeting. (bloomberg.com)) The Summary of Economic Projections’ dot plot puts the median federal‑funds rate at roughly 3.4% at the end of 2026. (usatoday.com)) Seven of the 19 FOMC participants signaled they expected rates to remain unchanged through 2026, one more than in December’s update. (cnbc.com)) Policymakers raised their 2026 inflation forecast to about 2.7% while nudging projected GDP growth for 2026 to 2.4% and leaving the median year‑end unemployment projection at 4.4%. (bloomberg.com)) Chair Powell told reporters it is “too soon to know the scope and duration” of the Middle East developments’ effects on the U.S. economy and said near‑term measures of inflation expectations had risen with oil prices. (bloomberg.com)) He reiterated a meeting‑by‑meeting, data‑dependent posture that leaves the Committee “flexible” in responding to energy‑driven shocks. (cnbc.com)) Markets repriced rate‑cut odds after the press conference: the 2‑year Treasury yield ticked up to about 3.71% intraday, adding roughly 3–4 basis points after the decision. (cnbc.com)) U.S. equity indexes swung sharply lower intraday, with the Dow down roughly 768 points and the S&P 500 off about 1.4% at session lows. (wtop.com)) Fed officials’ projections still show one quarter‑point cut penciled in for 2026 and another in 2027, but market pricing and officials’ upgraded inflation outlook tightened the path to multiple cuts this year. (bloomberg.com))
