The Fed maintains interest rates: First reactions from the management companies
19 MAR, 2026
The Federal Reserve followed the script and left interest rates unchanged —in the range of 3.5%-3.75%— at its March meeting, a decision widely anticipated by the market. However, beyond rates, the message emerging from the United States central bank points to growing caution: the resurgence of geopolitical risks, especially in the Middle East, has increased uncertainty about inflation and growth, conditioning the schedule of future cuts.
With a committee divided in nuances, but aligned in the "wait and see" strategy, international managers agree that the United States central bank keeps the door open to cuts, although their pace and magnitude will largely depend on the evolution of the conflict and its impact on prices and the labor market.
Roger Rüegg, Head of Multi-Asset Solutions at Zürcher Kantonalbank (Swisscanto)
As expected, the United States Federal Reserve has kept its key interest rate unchanged at 3.75%. The vote was very clear, with 11:1, where Stephen Miran was, unsurprisingly, the only dissenter. It is very likely that this will remain throughout the first half of the year.
Given that inflation fears have sharply increased due to the Iran crisis, the market now discounts the next rate cut only for April 2027. The Fed itself projects a cut this year and another in 2027. We see it somewhat differently and expect additional cuts in both September and December, mainly due to the weakening of the labor market. Although inflation is likely to increase by around 60 basis points due to higher oil prices, it should decline again over the year as the situation relaxes.
Lindsay Rosner, Director of Multisector Fixed Income Investment at Goldman Sachs AM
The Federal Reserve will maintain its cautious stance for now, waiting for the situation in the Middle East to clarify.
Despite higher inflation forecasts, the FOMC maintains an accommodative bias, with a tight majority of the committee expecting to resume cuts this year.
We continue to see room for two 'normalization' cuts in 2026, although their timing will depend on how long the conflict lasts.
Max Stainton, Senior Global Macroeconomics Strategist at Fidelity
The United States Federal Reserve kept rates unchanged, as expected, leaving the target range at 3.5–3.75%. In the statement, the FOMC made it clear that geopolitical risks add a higher level of uncertainty to both sides of its mandate, but aside from that there were few changes in a very consensus-based statement. In fact, the day was marked by few movements, with a slight increase of 20 basis points in core inflation expectations that did not translate to the interest rate side, resulting in a moderately dovish bias. However, the move to a single dovish dissenting vote, compared to the two or three expected, added a slightly more hawkish nuance. Overall, the feeling is that of a committee conditioned by uncertainty, waiting to see how events in the Middle East evolve.
In the press conference, President Powell tried to offer cautious and calm guidance, emphasizing the need not to overreact to current events and reminding that "it is too early to know how they will affect the data", insisting that uncertainty is exceptionally high. He also stressed the need to maintain credibility in inflation control, especially from the perspective of expectations. Powell made it clear that the Committee feels comfortable adopting a wait-and-see approach as the impact of the conflict unfolds, and highlighted the need for goods inflation to moderate significantly throughout the year. He was explicit in pointing out that any bias towards future cuts remains conditional on that progress materializing.
Looking ahead to the rest of the year, the evolution of rates will inevitably be dominated by what happens in the Middle East. In our central scenario, with high oil prices, but moving in a range of 90-110 dollars per barrel, we would expect the Federal Reserve to keep rates unchanged for longer, raising the bar for short-term cuts. Having said that, we do not believe that this environment, by itself, is enough to justify a new cycle of increases, as the impact on growth should be manageable and the shock would have a punctual effect on prices, rather than a generalized inflationary impulse.
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