The US Federal Reserve (FED) kept interest rates unchanged at 3.50% to 3.75% at the March FOMC meeting, as expected.
The decision was taken by an 11-1 vote, with Stephen Millan dissenting with a proposal for a quarter-point reduction.
In his oral statement, Fed Chairman Jerome Powell mentioned the possibility of raising interest rates as inflation risks have increased for the first time in a long time, and indicated that the Fed plans to cut interest rates once in 2026 and once in 2027.
Chairman Powell emphasized that inflation, particularly inflation driven by tariffs, needs to come down before interest rates can be cut again. “If we don’t see that progress, we won’t see a rate cut,” he said.
In response to these comments, US majors Goldman Sachs and Morgan Stanley revised the dates for their first interest rate cuts.
As a result, Morgan Stanley changed its forecast for interest rate cuts from June and September to September and December.
Goldman Sachs also changed its forecast for a rate cut from June to September.
The Fed cited increased uncertainty regarding the Middle East conflict as the main reason for the revised outlook.
This is a significant three-month delay compared to the previous June and September forecasts, taking into account the changing economic situation.
*This is not investment advice.
