March 18, 2026—The Federal Open Market Committee(FOMC) left the federal funds rate unchanged at 3.50%–3.75% at its second consecutive meeting on Wednesday, a pause that was widely anticipated. Although the expectation before the March meeting was a 25 basis point rate cut in June and another before the end of the year, FOMC voters are slowing down on those projections in the face of inflation that remains too high, weakening jobs reports, and the prospect of sustained higher oil prices.
The median prediction as indicated by the dot plot at the December meeting called for a fed funds rate range of 3.25 – 3.50%, a prediction of just one more cut in 2026. The most recent U.S. Consumer Price Index report (February 2026) shows headline CPI up 2.4% year over year and 0.3% month over month, up slightly from 0.2% in January, on a seasonally adjusted basis. The FOMC’s inflation forecast for the year was revised up to 2.7% from 2.5% at the December meeting.
In the statement released with the meeting, the FOMC changed the language that unemployment has “shown some signs of stabilization” to has “been little changed in recent months”. They also added that the “implications of developments in the Middle East for the U.S. economy are uncertain.”
At his post-meeting press conference, Fed Chair Jerome Powell—whose term ends on May 15—acknowledged that the FOMC has not made as much progress in cooling inflation as hoped. The event, possibly his second-to-last press conference as Chair, highlighted ongoing challenges in bringing inflation down. He cited that many on the committee are concerned about the recent low levels of job creation. Powell added that the “rate forecast is conditional on the performance of the economy, so if we don’t see that progress, then you won’t see that cut.”