The Federal Reserve held interest rates steady at 3.50%–3.75% on March 18, signaling caution as geopolitical tensions and persistent inflation complicate the policy outlook.

The FOMC said economic activity remains “solid,” while inflation is still “somewhat elevated.” 

However, policymakers explicitly flagged the Middle East conflict as a new source of uncertainty, noting that its economic impact remains unclear. 

One dissenting member voted for a rate cut, highlighting emerging divisions within the Fed.

The decision aligns with market expectations but reinforces a key shift: the Fed is in no rush to ease policy. 

Rising oil prices linked to the Iran conflict risk feeding into inflation, limiting the central bank’s ability to…