FOMC Press Conference, March 18, 2026

As expected, and bang in line with market pricing, the FOMC maintained the target range for the fed funds rate between 3.50% - 3.75% at the conclusion of the March meeting, extending a ‘pause’ in the easing cycle which began in January, amid an increasingly uncertain economic outlook in light of ongoing conflict in the Middle East, and the subsequent sharp ...

The press release reads very much like the one seven weeks earlier. Again and as was very widely expected, the federal funds rate was left unchanged at 3.50-3.75%. The insertion of a new sentence in paragraph two stating “the implications of developments in the Middle East for the U.S. economy are uncertain” merely states the obvious that elevated ...

Escalation of conflict in the Middle East has sparked a sharp increase in volatility in global financial markets, following a period of benign market conditions. Volatility has been particularly pronounced in energy and other commodity markets, and this has spilled over to other asset classes. Just prior to the escalation of the conflict, some firms had experienced sharp equity price declines as investors reassessed the prospects for AI to affect business models. Conditions for private credit markets had also become more challenging. Yet risk premia in global equity and credit markets have remained fairly low by historical standards. Additionally, even after an increase in government bond yields in several advanced economies, measures of sovereign bond term premia were well within historical ranges and markets remained functional. Resilience in the global financial system prior to the escalation of the conflict had been supported by systemically important banks remaining profitable and well capitalised, and growth in the global economy over the past year exceeding most analyst expectations, with trade flows adjusting relatively quickly to changes in tariffs. Corporate and household balance sheets in advanced economies have remained strong, although pockets of stress persist among non-prime borrowers. Reserve Bank of Australia observes that the likelihood of a major negative shock to Australia’s financial system has risen recently. RESERVE BANK OF AUSTRALIA CAUTIONS THAT THE MIDDLE EAST CONFLICT MAY TRIGGER A SIGNIFICANT INTERNATIONAL FINANCIAL DISRUPTION. ... Reserve Bank of Australia states that Australian banks are equipped to handle loan losses even during a severe economic downturn. RESERVE BANK OF AUSTRALIA INDICATES THAT HOUSEHOLDS AND BUSINESSES ARE GENERALLY IN SOLID FINANCIAL SHAPE AND UNLIKELY TO DESTABILIZE THE SYSTEM. ...