Federal Reserve policymakers kept their target interest rate unchanged Wednesday, citing uncertainty from "developments in the Middle East" prompted by the Iran war.
The Fed's Federal Open Market Committee (FOMC) kept the federal funds rate at 3.5-3.75pc in the second meeting of 2026, following quarter-point cuts in September, October and December last year.
"Uncertainty about the economic outlook remains elevated," the FOMC said in its statement. "The implications of developments in the Middle East for the US economy are uncertain."
In its latest median economic projections, released Wednesday, the Fed continued to pencil in one quarter-point rate cut this year, unchanged from the prior projection in December. Policymakers still see one more quarter-point cut in 2027.
Still, the Fed views its favorite measure of inflation rising to 2.7pc to end this year from a prior forecast for 2.4pc. Policymakers see inflation falling to 2.2pc next year.
They see GDP ending the year up an annual 2.4pc from a prior forecast of 2.3pc.
