On March 19, 2026, at 2 AM Beijing time, the Federal Reserve will announce its interest rate decision. The market expects a high probability of maintaining the interest rate at 3.50%-3.75% at 99.9%. Powell's speech and the dot plot's guidance on rate cuts are the focus.
The interest rate decision is widely expected to maintain the current rate, with data from the Chicago Mercantile Exchange showing a probability of 99.9% for no change. The Federal Reserve must weigh the complex situation of rebounding inflation (core PCE rising to 3.1%) against weak employment (non-farm payrolls decreasing by 92,000).
Powell faces multiple challenges and must respond to the oil price surge triggered by the Middle East conflict (Brent crude surpassing $90), stagflation risks, and the approaching end of his term (Chairman's term expires in May), suggesting a cautious stance while emphasizing a 'data-dependent' policy path.
The dot plot may reinforce hawkish expectations, with a forecast to lower the rate cut expectations for 2026 from one rate cut (25 basis points) predicted last December, and may even rule out the possibility of zero rate cuts, reflecting concerns over persistent inflation.
Geopolitical and domestic pressures are intertwined, as the situation in the Middle East raises energy prices, exacerbating inflationary pressures; Trump continues to push for rate cuts, but judicial investigations may affect Powell's successor nomination, adding uncertainty to policy continuity.