- Decision
- Maintain
- Rate change
- 0 bps
- federal funds rate
- 3.75%
The Federal Open Market Committee (FOMC) on 18 March 2026 left the federal funds target range at 3.50–3.75 percent, judging that solid economic activity and still-elevated inflation alongside subdued hiring and a broadly steady unemployment rate warranted no change while acknowledging heightened uncertainty, including from developments in the Middle East. After three consecutive 25 bp cuts between September and December 2025 that brought the range down by a cumulative 75 bp, the Committee has now held rates steady at two meetings. The statement contains no new operational changes beyond an accompanying implementation note. Policymakers observed that inflation remains above the 2 percent goal even as economic growth stays solid and labour-market gains are muted, and they reaffirmed vigilance toward risks on both sides of the dual mandate as well as readiness to adjust policy if needed. The decision passed 10–1, with Stephen I. Miran favouring a further 25 bp cut.
Rate evolution
From June 2025 to September 2026, the Federal Reserve lowered the target range for the federal funds rate by a net 50 basis points, from 4-1/4 to 4-1/2 percent to 3-3/4 to 4 percent, after holding steady through mid-2025, cutting over September to December, pausing through July 2026 and raising the range in September. The initial holds reflected activity that was still expanding, a low unemployment rate and solid labor market conditions, alongside inflation that remained somewhat elevated, while uncertainty had diminished somewhat in June but was still elevated and risks were seen on both sides of the dual mandate. Cuts began as growth moderated, job gains slowed, unemployment edged up and the Committee judged downside risks to employment had risen, even though inflation had moved up and remained somewhat elevated, with the late-2025 easing accompanied by dissents both for larger cuts and for no change.
The Committee kept the federal funds rate unchanged in April, June and July 2026 as activity expanded at a solid pace, unemployment changed little and inflation remained elevated. April cited higher global energy prices, while June and July pointed to supply shocks that drove price increases in certain sectors, including energy, and highlighted strong productivity growth, capital investment and job gains that kept pace with the workforce, while linking elevated uncertainty in part to the conflict in the Middle East. After three members dissented in July in favor of a 1/4 percentage point increase, the Committee unanimously raised the target range by that amount on September 16, citing resilient domestic spending, strong productivity growth, robust capital investment and elevated inflation, and said the action would support a timelier return to its 2 percent goal.