FOMC Keeps March Interest Rates Unchanged, Projects Little Change for 2026

• FOMC kept the Fed Funds Target Rate at 3.5% - 3.75% with an 11-1 vote, with Stephen Miran dissenting in favor of a cut.
• The Fed maintains projections for one rate cut in 2026 and one in 2027, which is fewer than the 2-3 cuts previously hoped for by many.
• The inflation outlook for the end of 2026 was raised to 2.7% (from 2.4%), while the unemployment rate projection remained unchanged at 4.4%.
• Available indicators suggest economic activity is expanding at a solid pace, but implications of Middle East developments are uncertain.

The FOMC kept interest rates unchanged, projecting only one rate cut in 2026 and 2027, fewer than market expectations. The inflation outlook was raised, while economic activity continues to expand at a solid pace. The Fed is balancing persistent inflationary pressures with a weakening labor market and geopolitical uncertainties.