economy
3 reasons the Federal Reserve's interest rate pause is worrying investors
Updated on: March 19, 2026 / 2:31 PM EDT / CBS News
TL;DR
- The Iran war is causing extreme uncertainty, leading the Federal Reserve to hold interest rates steady.
- Fed Chair Jerome Powell repeatedly used phrases like "we don't know" and "wait-and-see," indicating a paralysis due to the conflict's unknown economic effects.
- The likelihood of interest rate cuts in 2026 has significantly diminished, with CME FedWatch showing a high probability of no cuts.
- The Fed's Summary of Economic Projections indicates slightly hotter inflation expectations for 2026 and a divided committee regarding future rate cuts.
- The U.S. job market is stalling, with zero net job creation in the private sector and unexpected job losses in February, signaling a potential hiring recession.