More Fed Officials See Possible Rate Hikes This Year

Minutes show growing concern over inflation threat from Iran conflict

Apr. 8, 2026 at 11:18pm

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A minimalist, abstract illustration featuring overlapping triangles and circles in shades of blue, red, and yellow, conceptually representing the Federal Reserve's interest rate policy decisions and their impact on the broader economy.The Federal Reserve navigates a complex economic landscape as it weighs the need to raise interest rates against the risk of slowing growth.Washington Today

The Federal Reserve's March meeting minutes revealed that more policymakers were open to the possibility of interest rate hikes this year, as higher gas prices stemming from the Iran war threatened to worsen inflation. While the Fed kept its key rate unchanged at 3.6%, 'some' officials supported changing the post-meeting statement to reflect the potential for future rate increases, up from 'several' in January.

Why it matters

The Fed's dual mandate is to maintain low inflation and maximize employment, but the current economic situation poses a difficult challenge. Higher oil and gas prices could keep inflation elevated, potentially requiring rate hikes to push it back down. However, those same price increases could also force households to cut spending and slow economic growth, raising unemployment.

The details

The minutes showed that 'many' Fed officials pointed to the risk that higher oil and gas prices could keep inflation elevated for 'longer than expected, which could call for rate increases.' Ultimately, the Fed kept its key rate unchanged at 3.6% after cutting it three times at the end of 2025. Chair Jerome Powell downplayed projections that the Fed could reduce its rate once this year, saying that would depend on underlying inflation cooling steadily.

  • The Fed's March 17-18 meeting minutes were released on April 8, 2026.
  • The Fed kept its key rate unchanged at 3.6% at its first two meetings of 2026 after cutting it three times at the end of 2025.

The players

Federal Reserve

The central banking system of the United States that is responsible for monetary policy, including setting interest rates.

Jerome Powell

The Chair of the Federal Reserve, who downplayed projections that the Fed could reduce its rate once this year.

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What they’re saying

“If we don't see that progress then you won't see the rate cut.”

— Jerome Powell, Chair, Federal Reserve

The takeaway

The Federal Reserve faces a delicate balancing act as it tries to address the threat of higher inflation from the Iran conflict while also avoiding actions that could slow economic growth and increase unemployment. The central bank's policy decisions in the coming months will be closely watched for signs of how it navigates this 'two-sided' risk.