--- title: "Oil prices soar, reshaping the interest rate cut path! The Federal Reserve holds steady for the second consecutive time and raises inflation expectations across the board" type: "News" locale: "zh-HK" url: "https://longbridge.com/zh-HK/news/279681886.md" description: "Against the backdrop of increasing inflationary pressures and geopolitical risks, the Federal Reserve decided to maintain the federal funds rate in the range of 3.5% to 3.75%, marking the second consecutive time it has held steady. This decision reflects a growing divergence in the Fed's outlook on future interest rate paths, with an overall cautious attitude. Powell stated that the interest rate outlook depends on inflation trends and has raised the inflation expectations across the board, predicting that the PCE inflation rate will rise to 2.7% by 2026. The rise in international oil prices has become a key variable in the current inflation trajectory" datetime: "2026-03-18T22:27:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/279681886.md) - [en](https://longbridge.com/en/news/279681886.md) - [zh-HK](https://longbridge.com/zh-HK/news/279681886.md) --- > 支持的語言: [简体中文](https://longbridge.com/zh-CN/news/279681886.md) | [English](https://longbridge.com/en/news/279681886.md) # Oil prices soar, reshaping the interest rate cut path! The Federal Reserve holds steady for the second consecutive time and raises inflation expectations across the board According to Zhitong Finance APP, against the backdrop of renewed inflationary pressures and escalating geopolitical risks, the Federal Reserve has chosen to remain on hold. On Wednesday, the Federal Open Market Committee (FOMC) decided to keep the federal funds rate in the range of 3.5% to 3.75% with a vote of 11 to 1, marking the second consecutive time that rates have been held steady, with only Governor Milan supporting a 25 basis point cut. This decision comes at a critical juncture, as conflicts in the Middle East have pushed international oil prices above $109 per barrel, while the U.S. Producer Price Index (PPI) unexpectedly rose in February, significantly weakening market expectations for rate cuts this year. From the latest economic forecasts and dot plot released at this meeting, there is a clear increase in divergence within the Federal Reserve regarding the future path of interest rates, but the overall attitude is becoming more cautious. Most officials still expect a 25 basis point cut in 2026, followed by another cut in 2027, but compared to previous market expectations for multiple rate cuts, the policy path has clearly tightened. ![WeChat Screenshot_20260318164221.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260319/1773866566130790.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Powell clearly stated at the post-meeting press conference that the interest rate outlook depends entirely on inflation trends, saying, "If we don't see progress, there will be no rate cuts," and emphasized that "monetary policy has no preset path and decisions will be made at each meeting." It is noteworthy that the Federal Reserve has raised its inflation expectations across the board this time. According to the latest forecasts, the PCE inflation rate is expected to rise to 2.7% in 2026, up from the previous 2.4%, while core PCE inflation has also been raised to 2.7%. Powell admitted that although inflation is expected to decline, the progress "will not be as fast as previously anticipated," stating, "We will see some progress, but not as much as hoped." He also pointed out that tariff factors and recent increases in energy prices are driving up commodity inflation, while short-term inflation expectations have significantly risen due to soaring oil prices. ![WeChat Screenshot_20260318164420.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260319/1773866668293186.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Since the U.S. and Israel launched military actions against Iran in late February, international oil prices have continued to rise, becoming a key variable in the current inflation trajectory. Powell stated that the impact of energy price shocks will have a "dual effect" on the economy, pushing inflation up on one hand while suppressing consumption and employment on the other. However, he also noted that as a net exporter of energy, high oil prices will partially hedge the economy by boosting the profits and investments of energy companies. But he emphasized that this hedging effect depends on whether the rise in oil prices is sustained, stating, "Companies will only expand investments when they confirm that prices will remain high for the long term." Despite rising market concerns about stagflation risks, Powell made it clear that the current economy is far from that level. "Stagflation is a concept from the 1970s when both unemployment and inflation were at extremely high levels, whereas the current unemployment rate is close to long-term equilibrium levels, and inflation is only about one percentage point above the target," he said, preferring to view the current environment as "complex but manageable." In terms of economic fundamentals, the Federal Reserve painted a picture of "growth is still decent but risks are rising." The latest forecast shows a slight upward adjustment in GDP growth to 2.4% for 2026, partly reflecting expectations of productivity improvements, while the unemployment rate remains at 4.4%. However, the statement removed the previous wording of "the labor market is stabilizing," replacing it with "recent changes have been minimal," indicating a weakening confidence in the momentum of the job market. Powell also acknowledged that current policy faces a dilemma, stating, "The risk to employment is skewed to the downside, which supports rate cuts; while the risk to inflation is skewed to the upside, which means we need to maintain or even raise interest rates," and candidly remarked, "We are in a very difficult balancing position." ![WeChat Screenshot_20260318164523.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260319/1773866734193928.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Affected by policy signals and Powell's remarks, financial market volatility has intensified. Major U.S. stock indices dipped during the press conference, with the Dow Jones Industrial Average ultimately falling more than 768 points, while the S&P 500 and Nasdaq dropped by 1.36% and 1.46%, respectively; at the same time, U.S. Treasury yields rose and the dollar strengthened, significantly cooling market expectations for interest rate cuts within the year. Currently, interest rate futures indicate that investors expect only one possible rate cut before the end of the year. The current baseline scenario remains to keep interest rates unchanged and gradually lower them. Powell revealed that the committee did discuss the possibility of another rate hike, but emphasized that this is not the mainstream view. "The vast majority of officials do not see a rate hike as the baseline scenario," he said. This statement further reflects that, amid uncertainties regarding inflation and growth prospects, there remains considerable uncertainty in the Federal Reserve's policy path. Additionally, political and legal factors surrounding the Federal Reserve leadership have also become a focal point for the market. Powell stated that he has "no intention of leaving the board" until the investigation by the U.S. Department of Justice into the renovation project of his office building is "completely concluded," and mentioned that even if his term as chairman expires, he will continue to serve as acting chairman until a successor is confirmed. He also indicated that whether he continues to serve will depend on "the choice that is most beneficial for the institution." Currently, Kevin Walsh, the nominee to succeed by President Trump, remains in a confirmation deadlock due to related investigations and political maneuvering. Overall, against the backdrop of rising inflation expectations, increasing oil prices, and ongoing geopolitical risks, the Federal Reserve is shifting towards a more cautious policy stance. Maintaining high interest rates for an extended period is gradually becoming a consensus in the market, while developments in the Middle East and trends in energy prices will be key variables determining the future path of monetary policy ### 相關股票 - [iShares US Oil Equip & Svcs (IEZ.US)](https://longbridge.com/zh-HK/quote/IEZ.US.md) - [SPDR O&G Equip (XES.US)](https://longbridge.com/zh-HK/quote/XES.US.md) - [Pro Ultr Bloomberg Crude Oil (UCO.US)](https://longbridge.com/zh-HK/quote/UCO.US.md) - [VanEck Oil Services ETF (OIH.US)](https://longbridge.com/zh-HK/quote/OIH.US.md) - [Us Brent Oil (BNO.US)](https://longbridge.com/zh-HK/quote/BNO.US.md) - [SPDR O&G Ex & Prd (XOP.US)](https://longbridge.com/zh-HK/quote/XOP.US.md) - [ISHRS S&P Glb Engy (IXC.US)](https://longbridge.com/zh-HK/quote/IXC.US.md) - [United States Oil Fund LP (USO.US)](https://longbridge.com/zh-HK/quote/USO.US.md) - [Occidental Petroleum (OXY.US)](https://longbridge.com/zh-HK/quote/OXY.US.md) - [VanEck Oil Refiners ETF (CRAK.US)](https://longbridge.com/zh-HK/quote/CRAK.US.md) - [VG Energy (VDE.US)](https://longbridge.com/zh-HK/quote/VDE.US.md) - [iShares US Oil & Gas Expl & Prod (IEO.US)](https://longbridge.com/zh-HK/quote/IEO.US.md) - [SPDR Energy Select (XLE.US)](https://longbridge.com/zh-HK/quote/XLE.US.md) ## 相關資訊與研究 - [MORNING BID EUROPE-To dot, or not to dot, that is the question](https://longbridge.com/zh-HK/news/279537374.md) - ['Oil is the new Fed chair' - Peter Boockvar](https://longbridge.com/zh-HK/news/279661408.md) - [BofA, Standard Chartered raise Brent price forecast on Strait of Hormuz impasse](https://longbridge.com/zh-HK/news/279299466.md) - [Eurogroup chair says Europe should act swiftly to protect economies if energy prices stay high](https://longbridge.com/zh-HK/news/279057297.md) - [EU wheat regains ground with Chicago on Middle East war escalation](https://longbridge.com/zh-HK/news/279646243.md)