Fed Signals No Rate Cuts in 2026 After Iran War

Central bank holds steady as oil prices surge in wake of conflict

Mar. 18, 2026 at 7:33am

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The Federal Reserve is expected to announce on Wednesday that it will keep its key interest rate unchanged at around 3.6% for the second straight meeting. The central bank may also revise its forecast to show no rate cuts this year, a significant shift from its previous projection of one rate cut in 2026.

Why it matters

The Fed's decision on interest rates could have major implications for the U.S. economy, as higher rates make borrowing more expensive for consumers and businesses. The Iran war has sent oil prices higher and gas prices spiking, which could force the Fed to hold off on any rate cuts to see how the conflict plays out.

The details

Fed Chair Jerome Powell is set to announce on Wednesday that the central bank has kept its key interest rate unchanged at around 3.6% for the second straight meeting. The Fed will also release a set of quarterly projections, and they could alter their forecast to show no rate cuts this year, a significant course correction after 18 months of on-again, off-again rate cuts.

  • The Fed's two-day meeting ends on Wednesday, March 18, 2026.

The players

Jerome Powell

The Chair of the Federal Reserve, the central banking system of the United States.

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What they’re saying

“A key question hangs over the Federal Reserve's two-day meeting that ends Wednesday: Will central bank policymakers still reduce short-term interest rates this year, now that the Iran war has sent oil prices higher and gas prices spiking? Or will they have to stand pat for months to see how the conflict plays out?”

— Christopher Rugaber, Author (ajc.com)

What’s next

The Fed's decision on interest rates and its updated economic projections will be closely watched by investors and analysts for clues about the central bank's plans for the rest of the year.

The takeaway

The Fed's decision to hold off on any rate cuts this year reflects the uncertainty surrounding the economic impact of the Iran war, as higher oil and gas prices could weigh on consumer spending and business investment. This shift in the central bank's stance could have significant implications for the broader U.S. economy.