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Federal Reserve Holds Interest Rates Steady, Still Projects One Rate Cut in 2026

Fed maintains federal funds rate at 3.50%-3.75% and forecasts one 25-basis-point cut in 2026 amid inflation pressures linked to Middle East conflict, officials said.

  • Federal Reserve officials held rates steady Wednesday at about 3.6% and projected one key rate cut in 2026.
  • The Iran–Israel war pushed oil and fuel costs higher, with Brent crude jumping above $109 a barrel Wednesday and February payrolls falling by 92,000 amid a 0.7% rise in the Producer Price Index.
  • Fed projections show inflation easing to 2.7% by year-end, with core PCE revised up to 2.7% and the unemployment rate steady at 4.4%, while U.S. economic growth is projected at 2.4%.
  • Markets reacted immediately as stocks fell and gasoline prices hit $3.84 a gallon on March 18, while Fed Governor Stephen Miran dissented favoring a quarter-point cut.
  • Looking ahead, officials project inflation returning toward target, with expectations to fall to 2.2% in 2027 and hit 2% in 2028, despite leadership uncertainty with Powell's term ending soon.
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Interest rates set to be held steady as Iran war clouds inflation outlook

Some economists had previously been expecting policymakers to deliver a cut, prior to the escalation of the war in Iran.

·London, United Kingdom
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WWL broke the news in on Tuesday, March 17, 2026.
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