economy

March 18, 2026

Fed Still Expects to Cut Rates Once This Year Despite Spiking Oil Prices

The central bank's so-called dot plot showed a median estimate of 3.4% for the federal funds rate, the same as at the end of last year.

Fed Still Expects to Cut Rates Once This Year Despite Spiking Oil Prices

TL;DR

  • The Federal Reserve anticipates one interest rate cut this year.
  • This projection remains despite a spike in oil prices linked to the Iran war.
  • The dot plot shows a median federal funds rate estimate of 3.4% for the end of 2026, unchanged from last year's projection.
  • More Fed members are now forecasting one rate cut instead of two.
  • The Fed kept rates unchanged on Wednesday, voting 11-1.
  • Hotter inflation data has pushed back expectations for rate cuts.
  • Inflation projections for the year have increased, as has the forecast for economic growth.
  • Fed funds futures currently price in only one rate cut in 2026.

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