Minutes from the Federal Open Market Committee’s March 17–18 meeting show Fed officials divided on whether the war in the Middle East could prompt further rate cuts before the end of 2026. The meeting concluded with an 11–1 vote to hold the target federal funds rate at 3.50%–3.75%, while participants noted uncertainty about how geopolitical developments might affect the U.S. economy.
Many participants said it would likely become appropriate to lower the target range if inflation continued to decline in line with expectations. Rate cuts are typically seen as supportive for risk assets, including crypto, by freeing up liquidity and encouraging speculative investment. The Fed’s last cut was a 25 basis-point reduction on Dec. 10, 2025.
However, officials were split. Some argued for a two-sided outlook on future policy, acknowledging that upward adjustments could be necessary if inflation remained above target. Others highlighted downside risks to the labor market, observing that low net job creation left labor conditions vulnerable to adverse shocks.
The FOMC also described the situation in the Middle East as creating uncertainty, saying it was too early to know how events there would ultimately affect the U.S. economy. The Committee’s next meeting is set for April 28–29.
Market-implied odds from CME Group’s FedWatch tool at the time of the minutes showed a 75.6% chance that rates would remain at 3.50%–3.75% at the Fed’s Dec. 9 meeting, a 20.4% chance of a cut, and a 2.4% chance of a hike.