The Fed remains on hold as scheduled.
In the early morning of March 19, Beijing time, the Federal Reserve kept the federal funds rate target range unchanged at 3.5%-3.75%, in line with market expectations.
This is the Fed's second consecutive interest rate meeting to keep interest rates unchanged after January this year. This is also the second to last interest rate meeting before the end of Fed Chairman Powell's term in May. Another interest rate meeting will be held at the end of April. In 2025, the Federal Reserve cut interest rates by 25 basis points at three consecutive interest rate meetings in September, October, and December.
At this meeting, Fed Governor Milan voted against "as always" and he supported a 25 basis point interest rate cut at this meeting. The Federal Reserve has encountered dissenting votes in every interest rate meeting since the second half of 2025. Specifically, the dissenting votes for the interest rate resolutions in July, September, October, December, January and March of 2026 were 2 votes, 1 vote, 2 votes, 3 votes, 2 votes, and 1 vote respectively.
Fed Governor Waller, who like Milan voted against the rate cut at the January meeting, voted in favor of keeping interest rates unchanged.
Changes in the situation in the Middle East are the biggest new variable since the January meeting. The Federal Reserve stated in its interest rate statement that the impact of developments in the Middle East on the U.S. economy is uncertain.
Since the United States and Israel attacked Iran, the price of Brent crude oil has risen from more than 70 US dollars per barrel to more than 100 US dollars. Rising oil prices may push up inflation in the U.S. economy and undermine economic growth. The "oil crisis" in the 1970s caused the phenomenon of "stagflation" in developed economies such as the United States.
The latest dot plot disclosed by the Federal Reserve shows that Fed officials hinted that interest rates may be cut once in 2026 and 2027, consistent with the forecast in December last year. It is worth noting that the dot plot is the personal forecast of Fed officials and is not the Fed's established plan or resolution.
In the latest economic outlook, Federal Reserve officials raised their expectations for the U.S. inflation rate this year, predicting that personal consumption expenditure inflation will be 2.7% in 2026, compared with the 2.4% forecast in December last year. In terms of other major economic data, GDP growth in 2026 is expected to be 2.4%, compared with 2.3% predicted in December last year; the unemployment rate is 4.4%, compared with 4.4% predicted in December last year;
Attachment: Comparison between the March meeting statement and the January meeting statement (red is new)
Available indicators suggest that economic activity has been expanding at a solid pace. The unemployment rate has changed little in recent months (January: the unemployment rate showed some signs of stabilizing) and inflation remains high.
The Committee seeks to achieve maximum employment and 2 percent inflation goals over the long term. Uncertainty about the economic outlook remains high. The impact of developments in the Middle East on the U.S. economy is uncertain. The Committee noted the risks on both sides of its dual mandate.
To support its objectives, the Committee decided to maintain the target range for the federal funds rate at 3.5%-3.75%. In considering the magnitude and timing of further adjustments to the target range for the federal funds rate, the Committee will carefully evaluate future data, the changing outlook, and the balance of risks. The Committee remains firmly committed to supporting maximum employment and restoring inflation to its 2 percent objective.
The Committee will continue to monitor the impact of future economic data as it assesses the appropriate stance of monetary policy. The Committee will be prepared to adjust the appropriate stance of monetary policy if risks materialize that would impede achievement of the Committee's twin objectives. The Committee's assessment will take into account a wide range of information, including labor market indicators, indicators of inflationary pressures and inflation expectations, and data on financial and international developments.
Those voting in favor include: FOMC Committee Chairman (Federal Reserve Chairman) Jerome H. Powell; Committee Vice Chairman (New York Fed President) John C. Williams; (Federal Reserve Governor) Michael S. Barr; (Federal Reserve Governor) Michelle W. Bowman; (Federal Reserve Governor) Lisa D. Cook; (Cleveland Fed President) Beth M. Hammack; (Federal Reserve Governor) Philip N. Jefferson; (Minneapolis Fed President) Neel Kashkari; (Dallas Fed President) Lorie K. Logan; (Philadelphia Fed President) Anna Paulson; (Fed Board Governor) Christopher J. Waller. Voting against the action was (Fed Governor) Stephen I. Miran
Removed and (Fed Governor) Christopher J. Waller
, he is inclined to cut interest rates by 0.25 percentage points at this meeting.
