WASHINGTON: The Federal Reserve held interest rates steady on Wednesday, March 18, projecting just one quarter-point cut by year-end amid elevated inflation and global uncertainty tied to the U.S.-Israeli war with Iran.
New forecasts show inflation ending 2026 at 2.7%, up from December’s 2.4% projection, driven by surging oil prices. The Fed cited unstable economic conditions but affirmed its data-driven approach.
Federal Reserve Chair Jerome Powell stated the conflict's economic impact remains unclear, though higher energy costs will lift inflation in the near term. Policy will remain responsive to incoming data and risk balance.
Growth is now forecast at 2.4% for 2026, up slightly from 2.3%. Unemployment holds at 4.4%. No officials expect a rate hike in 2026, though one projects a possible increase in 2027.
Powell emphasized the central bank's patience, saying monetary policy is well positioned to adapt. Fed Governor Stephen Miran dissented, favoring an immediate cut.