The US Federal Reserve (FED), in its March FOMC meeting, kept interest rates unchanged, in line with expectations, at 3.50-3.75 percent.
The decision was made with an 11-1 vote, with Stephen Miran opposing it with a proposal for a quarter-point reduction.
In his oral statements, FED Chairman Jerome Powell mentioned the possibility of raising interest rates due to the increasing risk of inflation after a long period, and stated that he plans to cut interest rates once each in 2026 and 2027.
Powell stressed that a decline in inflation, particularly goods inflation driven by tariffs, is necessary before interest rate cuts can resume. “If we don’t see that progress, there will be no interest rate cuts,” he said.
Following these statements, US giants Goldman Sachs and Morgan Stanley revised the expected date for the first interest rate cut.
Accordingly, Morgan Stanley shifted its expectations for interest rate cuts from June and September to September and December.
Goldman Sachs also shifted its interest rate cut forecast from June to September.
The primary reason cited for the revision in the forecasts was the Fed’s increased uncertainty regarding the conflicts in the Middle East.
This marks a significant three-month delay compared to previous June and September forecasts in light of evolving economic events.
*This is not investment advice.