The Federal Open Market Committee voted 11-1 on March 18 to leave its benchmark federal funds rate unchanged in a target range of 3.5 to 3.75 percent, the Federal Reserve announced Wednesday. The decision was widely expected but came with notable hawkish signals: policymakers revised their inflation projections upward and trimmed the number of expected rate cuts this year. Fox Business confirmed the hold under the headline "Federal Reserve holds interest rates steady" and covered Chair Jerome Powell's remarks in full. NPR reported that the Fed was holding "as the economy faces deep uncertainty," highlighting the Iran war's contribution to rising energy prices.
Updated projections released after the meeting showed Fed policymakers now expect the personal consumption expenditures price index — their preferred inflation gauge — to reach 2.7 percent in 2026, up from 2.4 percent projected in December. Core PCE inflation was also revised up to 2.7 percent, well above the Fed's 2 percent target. Powell said at his post-meeting press conference: "We're making progress on inflation, but not as much as we had hoped." He said that a "big chunk" of the above-target inflation reading — somewhere between a half and three-quarters — reflected tariff-related price increases. Oil prices, which surged following the start of the U.S.-Israel war with Iran on February 28 and the partial closure of the Strait of Hormuz, have added a second, parallel inflationary pressure on top of existing tariff costs.
The Fed's updated "dot plot" — the chart showing where individual committee members project interest rates to be in coming years — still points to one rate cut in 2026 and another in 2027, but the balance of projections shifted: four or five members moved from expecting two cuts to expecting just one. CNBC reported that the dot plot suggests rates could settle near 3 percent by the end of 2027, assuming inflation returns toward target. The sole dissenter in the 11-1 vote preferred to cut rates immediately, citing the deteriorating jobs data from the February report that showed 92,000 positions lost.
Powell also addressed his future at the Fed, stating he had "no intention of leaving the board" until a Justice Department probe — initiated by the Trump administration — was "well and truly over," according to CNN's live coverage of the press conference. The White House has publicly pressured Powell to cut rates. PBS NewsHour broadcast the full press conference. CBS News noted the Fed's explicit concern that the Iran war "clouds the economic outlook" in a way that makes the timing of any future rate cuts highly uncertain, as policymakers face the unusual challenge of combating both softening employment and an oil-driven inflation spike simultaneously — an environment some economists are calling stagflationary.
Left-Leaning Emphasis
- NPR and CNN framed the hold as evidence that the Iran war is creating a genuinely difficult stagflationary environment — with job losses mounting and energy-driven inflation rising simultaneously — and expressed concern that the administration's pressure campaign on Powell is undermining Fed independence.
- Left-leaning coverage emphasized that Powell's refusal to resign under Justice Department investigation pressure reflects the importance of institutional independence, and that any politically motivated interference with monetary policy could worsen the inflationary outlook.
Right-Leaning Emphasis
- Fox Business framed the Fed's hold as expected and appropriate given elevated uncertainty, while conservative commentators argued Powell should move more quickly to cut rates given the job market's evident weakness — aligning with Trump's calls for lower rates.
- Right-leaning financial coverage emphasized the one-cut projection as a near-term positive, noting that the Iran war's energy disruption is a temporary shock that the Fed should look through rather than treat as a structural inflation driver.
Sources
- Fox Business Mar 18
- NPR Mar 18
- CNBC Mar 18
- CNN Business Mar 18
- CBS News Mar 18