WASHINGTON – The Federal Reserve on Wednesday left interest rates unchanged, opting to hold its benchmark federal funds rate at 3.5 percent to 3.75 percent as policymakers weighed a softening labor market, persistent inflation, and growing uncertainty tied to the war in Iran.
The decision came after the central bank held rates steady in January, following three straight 25-basis-point cuts in September, October, and December to close out last year.
https://www.foxbusiness.com/economy/federal-reserve-interest-rate-decision-march-18-2026
Federal Reserve policymakers said recent economic data pointed to a labor market that is losing steam, while inflation continues to run above the Fed’s 2 percent target. At the same time, unrest in Iran added another layer of uncertainty to the economic outlook, helping drive the decision to pause further rate cuts.
The Federal Open Market Committee voted 11-1 to leave rates unchanged, with Fed Governor Stephen Miran casting the lone dissent in favor of a 25-basis-point cut.
In its statement, the FOMC said economic indicators suggest the economy is still expanding at a solid pace, even as job gains remain low and inflation stays somewhat elevated. The committee also said uncertainty surrounding the economic outlook “remains elevated” and noted that the “implications of developments in the Middle East for the U.S. economy are uncertain.”
Fed Chair Jerome Powell said during a press conference announcing the decision that the slowdown in hiring reflects lower demand for labor as well as a decline in immigration. He also said inflation readings remain elevated in the goods sector because tariffs are continuing to raise consumer prices.
