Fed meeting live updates: Federal Reserve holds rates steady, forecasts 1 rate cut in 2026

While the effects of the energy supply shock have been top of mind, Fed Chair Powell offered a reminder that the US is still working through tariff inflation as well.

"We're well aware of the performance of inflation over the last few years and how a series of shocks have interrupted progress that we've made over time," Powell said.

"The thing that's really important that we see this year is progress on inflation through a reduction in goods inflation as the one-time effects on prices of tariffs ... go through the economy," Powell said.

He added that the Fed won't be able to look through energy-driven inflation as transitory until it has "checked that box" of containing tariff inflation.

Taking a measured tone on the impacts of the conflict roiling the Middle East, Fed Chair Jerome Powell said in his prepared remarks, “The implications of developments in the Middle East on the US economy are uncertain.”

In the near term, energy prices will push up headline inflation, but it's still "too soon to know the scope and duration of the potential effects on the economy," Powell said.

The Fed's headline forecasts get most of the attention, but the SEP also reveals the range of projections offered by Fed officials.

Not surprisingly, the range of what officials deem the appropriate path for rates this year is wide — at least one Fed official thinks we need to see four cuts in 2026.

But what really stands out to us is the outlook for the labor market.

Given the slowdown we're seeing in hiring and the softness that appears to be spreading in some pockets of the white-collar workforce, that no Fed officials expect the unemployment rate to have a 5-handle this year is, frankly, a rosy outlook.

Federal Reserve Chair Jerome Powell has started speaking at the FOMC press conference.

We're listening for Powell's comments on the effects of the war in Iran on inflation expectations, the job market, housing, and the path of monetary policy looking ahead.

Powell is likely to be somewhat reserved in his remarks, however, given that the Fed underscored uncertainty about the economic outlook in its policy statement.

Watch the press conference live below or here on YouTube.

The Federal Open Market Committee's policy statement that accompanied the rate decision showed minor changes from January's statement.

Notably, the FOMC added a line about the war in the Middle East, stating that the implications of the conflict "are uncertain." The Fed also changed how it characterized the unemployment rate, opting to describe it as "little changed" instead of showing "signs of stabilization."

Here are the key changes, with additions bolded and subtractions in strikethrough text:

The Federal Reserve on Wednesday said it expects to cut rates once in 2026 while officials anticipate faster economic growth and hotter inflation this year than previously forecast.

The central bank's latest policy decision on Wednesday — which saw the Fed keep rates unchanged in a range of 3.5%-3.75% — also came alongside the release of the Fed's latest Summary of Economic Projections (SEP). The SEP includes forecasts for growth, inflation, the labor market, and interest rates from members of the Federal Open Market Committee.

In December, the last time Fed officials published their outlooks, forecasts called for one 0.25% rate cut in 2026, followed by two rate cuts of the same size in 2027. Those forecasts were unchanged this month, and a new outlook for 2028 sees the Fed keeping rates steady in a 3%-3.25% range two years out.

Wednesday's SEP showed that Fed officials now see inflation on both a headline and "core" basis standing at 2.7% at the end of this year. The Fed targets inflation that averages 2%. In December, the central bank expected core inflation — which strips out the more volatile costs of food and energy — to reach 2.5% by the end of 2026. Headline inflation, which includes all categories, was expected to reach 2.4% by the end of this year.

Economic growth forecasts also rose for 2026, with GDP now expected to grow 2.4% this year, up from a forecast for 2.3% growth as of December.

Notably, Fed officials don't foresee considerable further weakening in the labor market, with the unemployment expected to remain at 4.4% at the end of this year.

Read more here.

US equities ticked down slightly in the minutes after the Federal Reserve announced it would hold rates steady at a target range to 3.5% to 3.75%.

The S&P 500 (^GSPC) traded down by 0.6% on the session, while the blue chip-heavy Dow Jones Industrial Average (^DJI) lost 0.9%. The tech-exposed Nasdaq Composite (^IXIC) lost 0.5%.

Yields on 10-year Treasurys (^TNX) ticked up as investors priced in higher rates for longer, picking up 2.4 basis points on the session. The yield on -year Treasurys (^FVX) picked up 3.9 basis points.

The Federal Reserve kept interest rates in the 3.5%-3.75% range on Wednesday at the conclusion of its March meeting. The decision was widely expected, as the Fed remains in wait-and-see mode amid a moderating labor market and sticky inflation above officials' target.

In its Summary of Economic Projections, also known as the "dot plot", Fed officials penciled in one cut for 2026.

Fed Chair Jerome Powell will take the lectern at 2:30 p.m. ET to offer remarks on the economy and monetary policy. Markets will be listening closely for commentary on inflation expectations, as central bankers around the world face a cloudier outlook from higher energy costs.

Roughly 15 minutes out from what is going to be a closely watched Fed decision, even though the market has formed a consensus that rates will remain unchanged, oil prices are holding strong several dollars per barrel above where they opened Wednesday.

Futures on Brent crude (BZ=F), the international benchmark, are up roughly 3% from where they opened at 12 a.m. ET to trade above $104 per barrel. Those on US benchmark WTI crude (CL=F) are up 5% to trade above $97 per barrel.

The big question for the Fed is whether it sees the Middle Eastern energy crisis as a transitory shock to be "looked through" or as a legitimate, long-lasting shock that can meaningfully move up headline inflation, bleed into core inflation, and ultimately stunt growth down the line.

Happy Fed Day to all who celebrate.

Today’s FOMC meeting lands on top of a crowded global bet.

BofA’s March Global Fund Manager Survey shows that big institutional investors are the most overweight in emerging market stocks since February 2021 and commodities since April 2022, while still underweight in the US dollar.

That puts the greenback at the center of today’s decision. Powell does not have to move rates to move markets.

If he sounds hawkish and the US dollar index (DX-Y.NYB) pushes back above 100, that could pressure the trades investors have piled into abroad. A softer tone would ease that pressure and give emerging markets stocks and commodities more room.

The level to watch is 100 on the dollar index. A clean break above it tightens the screws. Another rejection keeps the global risk trade alive.

After cutting interest rates three times in 2025, the Fed has held its benchmark rate steady at 3.50% to 3.75% in its first meeting of the year, signaling a more cautious, wait-and-see approach. But how long will the Fed hold rates at the current level?

Yahoo Finance's Ivana Pino explains that while the Fed doesn’t necessarily announce its plans ahead of time, there are a few factors experts look at to forecast potential changes to the federal funds rate. She writes:

Read more here.

The Bank of Canada kept interest rates steady at 2.25% on Wednesday, as widely expected.

Canada's central bank, like others around the world, is facing a murkier outlook since the war in Iran broke out. Ongoing uncertainty around the renegotiation of the US–Mexico-Canada Agreement also adds to the uncertainty.

"The war in the Middle East has increased volatility in global energy prices and financial markets, and heightened the risks to the global economy," the BoC statement said, as reported by Yahoo Finance's John MacFarlane. "The breadth and duration of the conflict, and hence its economic impacts, are highly uncertain."

Read the latest live updates on the Bank of Canada decision and press conference here.

US producer prices rose more than twice as fast as expected in February, according to data released Wednesday by the Bureau of Labor Statistics (BLS).

The Producer Price Index (PPI) rose 0.7% in February over the previous month, up from January's 0.5% gain and more than double economists' expectations for an increase of 0.3%.

Excluding the more volatile food and energy costs, producer prices advanced by 0.5% over the previous month, outpacing the 0.3% growth economists had predicted but below the previous month's gain of 0.8%.

On a year-over-year basis, headline prices rose by 3.4%, above estimates of 3% and the previous month's 2.9% year-on-year increase. Wholesale prices excluding food and energy rose 3.9% year over year, hotter than the 3.7% estimate and the previous month's 3.6%.

Inflation will be top of mind for Fed officials today as they weigh the surge in energy prices from the Iran war against potential growth risks down the line. Fed officials are widely expected to hold interest rates steady at the conclusion of their policy meeting on Wednesday.

Read more here.

Yahoo Finance's Hamza Shaban writes in today's Morning Brief newsletter:

Read more here.

In addition to the Federal Reserve, several other global central banks are in focus this week as they are expected to deliver policy decisions and address the economic fallout from the Middle East war.

"The supply shock is resulting in a market lowering growth expectations and increasing inflation expectations," Capital analyst Kyle Rodda told my colleague Jake Conley. "That's manifesting in doubts about future profitability and the path forward for global interest rates."

Here's an overview of at the major policy decisions unfolding this week:

Reserve Bank of Australia: The RBA raised the cash rate by 25 basis points to 4.1% on Tuesday as policymakers viewed the war in the Middle East as adding to inflation already deemed too high. For more details on the decision, read Yahoo Finance Australia's coverage here.

Bank of Canada: Canada's central bank is expected to continue to keep borrowing costs at 2.25% on Wednesday as the country navigates moderating growth and the renegotiation of the US-Mexico-Canada trade agreement, as well as the global oil shock.

European Central Bank: The ECB is expected to hold interest rates steady on Thursday, March 19, despite concerns of rising eurozone inflation. ECB policymakers are expected to offer assurances that the central bank won't allow another inflation shock like the one experienced in 2022, when Russia invaded Ukraine.

The Bank of England: The BOE is also expected to keep interest rates unchanged at 3.75% on Thursday. Just two weeks ago, the United Kingdom's central bank was expected to deliver its first of two interest rate cuts of the year, but that calculus changed after data released Friday showed economic growth stagnated in January.

Riksbank: Sweden's central bank is expected to hold rates steady at 1.75% on Thursday.

Swiss National Bank: Switzerland's policymakers are expected to keep rates unchanged at 0% on Thursday.

Read more here.

On Wednesday, the Federal Reserve will print its quarterly economic projections alongside its decision. This summary, also known as the "dot plot", offers insights into what the Fed will do in the short term.

Yahoo Finance's Sarah C. Brady writes:

Learn how to read the Fed's dot plot here.

The Federal Reserve signaled in January that it would hold off on raising rates for an undetermined period. That raises the question: What does this mean for mortgage rates?

Yahoo Finance's Hal Bundrick explains that the Federal Reserve and mortgage rates are working on two ends of a timeline. The Fed steers short-term interest rates, and mortgage rates are influenced by long-term bonds.

That means mortgage rates are priced to a longer-term benchmark, such as the 10-year Treasury. The bond market generally reacts to longer-term events, such as inflation, employment, and macroeconomic trends.

He writes:

Read more here.

US stocks cautiously rebounded for the second day in a row on Tuesday as the Fed's two-day policy meeting began. And while stocks often react to expectations of the Fed's policy actions and to those actions themselves, the markets' focus has largely been on crude oil prices and the outlook for inflation.

As of Tuesday, traders were pricing in a 98.9% chance that the Fed keeps interest rates at the same level tomorrow, according to CME FedWatch. The other 1.1% of traders expect a 25 basis point rate hike — a turn from the sliver of traders betting on a rate cut just a month ago.

The Federal Reserve doesn't directly oversee markets, its actions can affect sentiment and ripple through equities, bonds, and other asset classes. As Yahoo Finance's Catherine Brock points out, investor expectations can trigger stock price swings when those expectations diverge from the Fed’s decision.

Or as David Russell, global head of marketing strategy at trading platform TradeStation, explained, “The Fed’s main impact on the stock market is to confirm or reject expectations about rates and the economy.”

Read more here about how the Fed affects stocks.

The oil shock from the war in the Middle East raises three major questions for the central bank this week: How will the surge in energy prices impact inflation expectations? Will higher oil costs bleed through to core prices? And how will the Fed respond?

Yahoo Finance's Jennifer Schonberger reports:

Read more here.

The federal funds rate influences savings rates, interest charges, and, to a small degree, mortgage rates. Wall Street traders, as measured by federal funds futures trading, put the next rate cut no sooner than October.

Yahoo Finance's Hal Bundrick breaks down how the continuing rate pause may impact deposits, credit, and debt:

Read more here.