US Federal Reserve members expressed divided views on whether the Middle East conflict could prompt further interest rate cuts before the end of 2026. The March FOMC meeting minutes, released Wednesday, showed an 11-1 vote to maintain current rates at 3.5% to 3.75%. Officials remained cautious about the economic impact of ongoing global conflicts.
Many participants believed lowering the federal funds rate target range would eventually be appropriate if inflation declined as expected. However, some voiced concern that rate hikes might be necessary if inflation persisted above target levels. Labor market vulnerabilities were also cited as a potential risk. The consensus suggests that while a rate cut remains a possibility this year, it is too early to fully assess the economic fallout from Middle East developments.