18.03.2026 21:21
The news that the markets have been eagerly awaiting has arrived; the Federal Reserve has announced its interest rate decision. The bank kept the policy rate unchanged in the range of 3.50-3.75%, in line with expectations.
The Federal Reserve (Fed) kept the policy interest rate stable in the range of 3.5-3.75 percent, in line with expectations.
DECIDED WITH 11 VOTES AGAINST 1
In a statement from the Fed, it was noted that the decision to keep the interest rate stable was made with 11 votes against 1. It was reported that Fed Board Member Stephen Miran voted against because he favored a 25 basis point rate cut.
The statement indicated that current indicators show economic activity is expanding at a solid pace, while employment growth remained low and the unemployment rate has changed very little in recent months.
The statement expressed that inflation continues to remain somewhat high. It was also stated that uncertainty regarding the economic outlook remains high, with the assessment that "the effects of developments in the Middle East on the U.S. economy are uncertain."
The statement reported that the Federal Open Market Committee (FOMC) decided to maintain the target range for the federal funds rate at 3.5-3.75 percent to support its objectives.
FED STARTED THIS YEAR BY KEEPING THE POLICY INTEREST RATE STABLE
Last year, the Fed kept the policy interest rate stable during the first five meetings, while it made a total of 75 basis points cut in September, October, and December. After making three consecutive rate cuts last year, the bank kept the policy interest rate stable in its first meeting of this year.
ECONOMIC FORECASTS WERE ALSO ANNOUNCED
After the two-day Federal Open Market Committee (FOMC) meeting, the Fed, which kept the policy interest rate stable in the range of 3.5-3.75 percent in line with expectations, also announced its economic forecasts.
The Fed maintained its forecast for the federal funds rate at 3.4 percent for the end of this year, as it had predicted last December. The bank also kept its forecasts for the federal funds rate at 3.1 percent for 2027 and 2028, while raising its long-term average interest rate expectation from 3 percent to 3.1 percent. These forecasts signaled that the Fed continues to anticipate a rate cut in 2026.
The bank's inflation forecasts were raised from 2.4 percent to 2.7 percent for this year, from 2.1 percent to 2.2 percent for 2027, while remaining stable at 2 percent for 2028. The forecasts for core inflation, which excludes volatile energy and food prices, were also raised from 2.5 percent to 2.7 percent for this year, and from 2.1 percent to 2.2 percent for 2027. The core inflation forecast was maintained at 2 percent for 2028.
UPWARD REVISION IN GROWTH FORECASTS
The growth forecast for the U.S. economy was raised from 2.3 percent to 2.4 percent for this year, from 2 percent to 2.3 percent for 2027, and from 1.9 percent to 2.1 percent for 2028.
The forecasts for the unemployment rate were left at 4.4 percent for this year and 4.2 percent for 2028, while it was raised from 4.2 percent to 4.3 percent for 2027.