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Fed Minutes Show Split on Rate Cuts as War and Oil Risks Cloud Outlook

Markets now price a higher chance that rates stay unchanged through December 2026.

Overview

  • Minutes from the March policy meeting describe a two‑sided path, with cuts only if inflation cools and hikes still possible if it stays high.
  • Officials left the federal funds rate at 3.50% to 3.75% in an 11–1 vote, with Stephen Miran favoring a quarter‑point cut.
  • Policymakers said the Middle East conflict has raised uncertainty because higher oil can lift prices, squeeze household budgets, and slow growth abroad.
  • The minutes note models that point to one or two 25‑basis‑point cuts before December 2026 if inflation eases as projected.
  • Futures data from CME Group shows investors now see a much higher chance of no change this year than of cuts.