Fed, BoC hold rates
The Federal Reserve and the Bank of Canada kept interest rates steady at their March meetings, and traders pared back near‑term rate‑cut expectations as geopolitical energy risks rose. Major indexes closed near recent lows and borrowing costs look set to stay elevated in the short term — central bankers cited heightened uncertainty from oil-price shocks and Middle East tensions as a reason for restraint. ( )
The Federal Open Market Committee left the target federal‑funds range at 3.50%–3.75% in its March 18 meeting, with the policy vote recorded as 11–1. (cnbc.com) The Fed’s implementation note updated the operational rate, keeping the interest rate paid on reserve balances at 3.65% effective March 19, 2026. (federalreserve.gov) FOMC participants’ March “dot‑plot” continued to show a median projection for one quarter‑point rate cut in 2026 and another in 2027, while upward revisions in 2026 inflation forecasts were also noted. (bloomberg.com) Investors trimmed the odds of early easing after Powell’s press conference, with federal‑funds‑futures pricing moved by traders and Bloomberg calling the chance of a 2026 cut “essentially a coin flip.” (bloomberg.com) CME FedWatch and related market trackers showed the probability of the Fed holding again in April rose sharply to the mid‑90% range, while the chance of a hold in June climbed to roughly three‑quarters. (cbsnews.com) Major U.S. equity benchmarks finished Wednesday notably lower — the S&P 500 fell about 1.4% to 6,624.70 and the Dow slid roughly 1.6% to 46,225.15 — placing indexes near recent lows. (fool.com) Short‑term borrowing costs climbed after the meeting: two‑year Treasury yields moved up toward the high‑3% area (about 3.70–3.78%) and the 10‑year yield rose toward the mid‑4% range, sending short‑end yields to roughly seven‑month highs. (cnbc.com) The Bank of Canada’s March 18 statement held the overnight target at 2.25%, with the Bank Rate at 2.50% and the deposit rate at 2.20%, explicitly citing the Middle East conflict and a sharp rise in global energy prices as heightened risks to the outlook. (bankofcanada.ca)
