US Federal Reserve kept interest rates unchanged in the 3.5%-3.75% range at the end of its two-day policy meeting on Wednesday, but indicated one rate cut this year and another in the next year. The decision was widely expected amid a moderating labour market and sticky inflation above the Fed officials’ target.In its Summary of Economic Projections, also known as the “dot plot”, Fed officials penciled in one cut for 2026. In December, the median of individual officials’ projections was one rate cut this year. Fed officials in recent weeks have said the Iran conflict raises uncertainty, potentially pushing back the timeline for rate cuts under consideration for later this year.
US markets slipped modestly with the S&P 500 declining 0.6%, while the Dow Jones Industrial Average dropped 0.9%. The tech-heavy Nasdaq Composite fell 0.5%.
In the bond market, yields firmed up as investors recalibrated expectations towards a prolonged higher-rate environment. The 10-year Treasury yield rose 2.4 basis points, while the 5-year Treasury yield advanced 3.9 basis points.Fed Chair Jerome Powell will brief at 2.30 PM ET (1 am IST) to offer remarks on the economy and monetary policy.First Published: Mar 18, 2026 11:37 PM IST
