Minutes from the Federal Open Market Committee’s March 17–18 meeting show policymakers divided on whether the war in the Middle East could prompt additional rate cuts before the end of 2026. The committee voted 11–1 to keep the target federal funds rate at 3.50%–3.75%, while noting that geopolitical developments added uncertainty to the outlook for the U.S. economy.
Many participants said it would likely become appropriate to lower the target range if inflation continued to fall in line with expectations. Such cuts are typically viewed as supportive for risk assets — including cryptocurrencies — by increasing liquidity and encouraging speculative investment. The Fed’s most recent reduction was a 25 basis-point cut on Dec. 10, 2025.
Officials were split, however. Some argued for a two-sided outlook, stressing that policy might need to move higher if inflation ran persistently above the committee’s target. Others warned of downside risks to the labor market, noting that weak net job creation left labor conditions more vulnerable to adverse shocks.
The FOMC described the situation in the Middle East as a source of uncertainty and said it was too soon to judge the ultimate economic impact. The committee’s next meeting is scheduled for April 28–29. Market-implied odds from CME Group’s FedWatch tool, as reported with the minutes, assigned a 75.6% probability that rates would remain at 3.50%–3.75% by the Dec. 9 meeting, a 20.4% chance of a cut, and a 2.4% chance of a hike.