A Nearly Unanimous Decision Out of 12 voting members, 11 supported maintaining the status quo. Only Governor Stephen Miran voted for an immediate 0.25 percentage point cut. Jerome Powell, still serving as “chair pro tempore” while awaiting Senate confirmation of his successor, justified the hold by citing “elevated uncertainty” linked to the U.S./Israel–Iran conflict. “We do not yet know whether the effects of the energy shock will be transitory or more lasting. It is therefore too early to adjust our policy,” Powell stated during the press conference.

Economic Projections Revised Upward on Inflation The Summary of Economic Projections (SEP) released alongside the decision reflects a clear adjustment to current realities: As a direct result, the Fed now anticipates only one 0.25% rate cut for the remainder of 2026 (instead of two or three previously expected). Several members shifted their “dots” toward an even more restrictive scenario.

Oil – The Fed’s Public Enemy No. 1 The Middle East conflict has sent energy prices soaring:

Brent crude frequently above $100–$112 per barrel U.S. diesel approaching $5.40 per gallon in several regions National average gasoline price around $4.85 per gallon

This “oil shock” is directly feeding into PCE inflation. Powell acknowledged that inflation could rise “temporarily” above 3% in the coming months, but the Fed is not yet treating the shock as structural. Labor Market: Signs of Fragility The Fed is also closely monitoring employment. Following a surprise loss of 92,000 jobs in February 2026, job creation remains very weak. The 4.4% unemployment rate is still viewed as consistent with full employment, but Fed economists note a clear slowdown. Powell reiterated that the central bank will only cut rates if the data confirm a “significant and sustained” weakening in the labor market. Impact on Americans and Markets

Borrowers: 30-year mortgage rates remain high (around 6.8–7.1%). A Fed rate cut is not expected before autumn at the earliest. Businesses: Borrowing costs stay elevated, slowing investment — especially in transport-dependent sectors (logistics, agriculture, construction). Stock Markets: Wall Street rebounded yesterday on optimistic comments from President Donald Trump about “productive discussions” with Iran, but futures are slightly lower this morning amid persistent tensions.

Key Takeaway The Federal Reserve has entered a phase of cautious waiting. It wants neither to reignite inflation with premature cuts nor to tip the economy into recession by keeping policy too tight for too long. Everything now depends on two factors:

The evolution of the Middle East conflict and oil prices. Upcoming monthly inflation and employment data (next CPI report due April 10).

Jerome Powell summed it up in one sentence: “We remain data-dependent. We will adjust our policy based on the facts, not on hopes.”