Fed holds while IMF warns
The Federal Reserve left rates unchanged at 3.5%–3.75% this week, citing persistent inflation and global uncertainty. At the same time the IMF warns prolonged energy-price increases could both lift inflation and lower growth — markets reacted with the dollar slipping and safe‑haven moves roiling gold and bonds ( )
The Fed’s March Summary of Economic Projections lifted its median core PCE forecast to 2.7% for 2026 and shows the median participant expects the federal funds rate at about 3.4% at year‑end, a path that implies roughly one 25‑basis‑point cut penciled in for 2026. (prod-i.a.dj.com) The FOMC vote on March 18 was 11–1, with Governor Stephen Miran the lone dissenter favoring a 25‑bp reduction. (cnbc.com) The Board of Governors separately voted unanimously to maintain the interest paid on reserve balances at 3.65%, effective March 19. (federalreserve.gov) Chair Jerome Powell told reporters the implications of recent Middle East developments for the U.S. economy are “uncertain,” saying it is still “too soon to gauge” how the surge in oil will feed through to inflation. (federalreserve.gov) The IMF put numbers behind the risk: crude has risen more than 50% to above $100 a barrel, and a sustained 10% energy‑price increase would, by the fund’s rule of thumb, add about 40 basis points to global inflation and trim world output by 0.1–0.2% over a year. (uk.finance.yahoo.com) Markets moved sharply — spot gold slid to roughly $4,654.29 an ounce and silver plunged as investors dumped metals, while global sovereign bond markets tumbled as traders repriced a higher‑for‑longer policy outlook. (cnbc.com) Currency flows were mixed: Reuters reported the dollar was heading for a weekly loss even as some safe‑haven demand appeared at times, and market data showed the DXY trading in the high‑99s on March 19. (msn.com) IMF spokeswoman Julie Kozack said the fund has received no formal requests for emergency financing and will incorporate the conflict’s economic effects into its updated global outlook to be released at the IMF‑World Bank spring meetings in mid‑April. (uk.finance.yahoo.com)
