Will US Federal Reserve hold key interest rates this week? Here's what investors should know ahead of FOMC meeting outcome

According to the official schedule, the US Fed’s Federal Open Market Committee (FOMC) meeting will be held from Tuesday, March 17, to Wednesday, March 18, 2026, after which the central bank will announce the outcome of the policy.

This month’s Federal Reserve policy meeting will mark the second-to-last one for Chairman Jerome Powell, whose term is set to end in the month of May 2026. Powell’s last policy meeting as the Chairman will be the April one, scheduled to be held on April 28 to 29, according to the official data.

The upcoming US Fed’s policy outcome will come on the backdrop of the raging tensions in the global economy due to the escalating conflict between the United States and Iran, with either side retaliating to attacks and putting pressure on the global oil trade.

As the conflict entered the third week after emerging from the US attacks on Iran two weeks ago, on February 28, 2026, the geopolitical concerns have intensified with Iran’s recent drone attacks on critical oil and natural gas energy infrastructure in the United Arab Emirates (UAE).

What does the market expect?

Major US-based market exchanges operator, CME Group’s FedWatch data, suggests that the experts are indicating that there is a 99.1% probability that the Federal Reserve’s Federal Open Market Committee (FOMC) is likely to keep the key benchmark interest rates for the US economy unchanged at the range of 3.50% to 3.75%.

However, the data also suggested that there is a 0.9% chance that the committee cuts the key interest rate to the range of 3.25% to 3.50% in the upcoming meeting outcome. And there were no expectations of a potential rate hike in the outcome of the US Fed’s March policy meeting.

What was US Fed’s January policy outcome?

After three consecutive rate cuts in the last three FOMC meetings, Jerome Powell-led US Federal Reserve decided to keep the key interest rate unchanged at a range of 3.50% to 3.75%, citing that the inflation rate in the economy remains at a ‘somewhat elevated’ level.

“In support of its goals, the committee decided to maintain the target range for the federal funds rate at 3.5 to 3.75%. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” said the FOMC in its official statement.

Out of the 12 members on the monetary policy committee, only two were against this decision, and both Stephen I. Miran and Christopher J. Waller preferred the key interest rate to be lowered by 25 basis points. The remaining 10 members of the committee, including Jerome Powell was in support of the rates on hold and assessing further economic data for a way forward.

Although the Federal Reserve has a dual mandate of keeping inflation in control along with catering to the labour market in the economy, the central bank also considered the current global dynamics before imposing any changes to the interest rates in the economy.

The US Labor Bureau data released earlier this month for February 2026 showed that the CPI inflation in the US economy rose by 3%, compared to a 2% level of inflation increase in January 2026.