TLDR
- The Fed voted 11-1 to hold rates steady at 3.5%–3.75% at its March meeting
- Officials are split on whether the Iran war will push inflation higher or hurt jobs
- Some members said rate cuts could still happen if inflation falls as expected
- Others warned rate hikes may be needed if inflation stays above the 2% target
- The next FOMC meeting is April 28–29; markets give a 75.6% chance of a hold
The Federal Reserve released minutes from its March 17–18 FOMC meeting on Wednesday, showing officials are divided on what to do with interest rates as the Iran war creates uncertainty for the U.S. economy.
FOMC MINUTES:
MANY SAID INFLATION HIGHER FOR LONGER COULD CALL FOR HIKES
MOST SAID PROTRACTED WAR COULD HIT JOBS, WARRANT CUTS
SOME SAW `STRONG CASE' FOR TWO-SIDED LANGUAGE ON RATE PATH
A COUPLE OF PARTICIPANTS PUSHED THEIR ASSESSMENTS FOR TIMING OF RATE CUTS FURTHER INTO…
— Wall St Engine (@wallstengine) April 8, 2026
The committee voted 11-1 to hold the federal funds rate at 3.5% to 3.75%. That decision was widely expected, but the debate inside the meeting was more complex.
Most participants said the Iran war has raised the risk of inflation staying high and the job market getting weaker. They flagged rising oil prices as a key concern, saying higher energy costs could reduce household spending and slow economic growth.
“Many participants judged that, in time, it would likely become appropriate to lower the target range for the federal funds rate if inflation were to decline in line with their expectations,” the minutes stated.
The last rate cut was on December 10, 2025, when the Fed cut by 25 basis points.
Cuts and Hikes Both Still on the Table
Some officials pushed back on the idea of future cuts. They argued that the Fed should keep open the possibility of raising rates if inflation stays above the 2% target.
“Some participants judged that there was a strong case for a two-sided description of the Committee’s future interest rate decisions,” the minutes read, pointing to the chance of hikes if needed.
The labor market also came up as a concern. Officials noted that job creation has been slow, making the market “vulnerable to adverse shocks.”
Rate cuts are generally seen as positive for crypto markets. Lower rates tend to free up investment liquidity and push investors toward riskier assets like Bitcoin.
Bitcoin dropped following the release of the minutes, falling from around $71,800 to approximately $71,200, according to TradingView data.
What the Market Is Pricing In
According to CME Group’s FedWatch tool, there is currently a 75.6% chance the Fed holds rates at its December 8 meeting. A rate cut has a 20.4% probability, while a hike sits at just 2.4%.
Most officials said it is too early to know how the Iran war will affect the U.S. economy. They agreed to keep monitoring the situation on a meeting-by-meeting basis.
The Fed’s dual mandate covers both stable prices and maximum employment. Officials said both goals face elevated risks right now.
The FOMC also noted that reaching its 2% inflation target could take longer than expected. They cited tariff effects, rising oil prices, and the risk that years of above-target inflation could make long-term expectations harder to manage.
The next FOMC meeting is scheduled for April 28–29.
