-
Fed held rates steady at 3.75% upper bound, aligning with expectations, while projecting cuts in 2026-2027 despite energy shocks and Middle East uncertainty.
-
Statement saw only cosmetic updates with higher growth (esp. 2027) and inflation forecasts (sub-3%), but disinflation path to 2% target intact by 2028.
-
Initial dollar weakened mildly (dovish signal); EURUSD moves tied more to energy prices than Fed tweaks.
-
Fed held rates steady at 3.75% upper bound, aligning with expectations, while projecting cuts in 2026-2027 despite energy shocks and Middle East uncertainty.
-
Statement saw only cosmetic updates with higher growth (esp. 2027) and inflation forecasts (sub-3%), but disinflation path to 2% target intact by 2028.
-
Initial dollar weakened mildly (dovish signal); EURUSD moves tied more to energy prices than Fed tweaks.
In line with market expectations, Fed decided to keep interest rates unchanged with the upper bound of the key rate at 3.75%.
A key factor in the projections is the maintenance of expectations for interest rate cuts in 2026 and 2027, despite the recent supply shock in the energy market. The Fed points out in its statement the uncertainty related to the situation in the Middle East. It continues to emphasize elevated inflation (with an obvious risk of a rebound above 3% if oil prices remain above 100 USD per barrel). The Fed also highlights that the economy is growing at a strong pace.
Nevertheless, it should be noted that the statement itself has changed only cosmetically. This means that the Fed has not yet altered its approach to interest rates, which can be seen as slightly dovish (the dollar weakened in the initial reaction). In the macroeconomic projections, we see slightly higher growth forecasts (mainly for 2027) and a clearly revised upward inflation projection (though it remains below 3%). However, it should be noted that the trend remains downward, and inflation is expected to return to target in 2028, in line with previous forecasts.
Cosmetic changes in statement with added uncertainty about the Middle East. Source: XTB, Bloomberg
The Fed expects further cuts this year and next, but is revising its inflation projections upward for this year but maintaining its expectation of a decline to target by 2028.. Source: Fed
First reaction was negative for the dollar, but but the changes are still minimal. EURUSD is currently reacting primarily to issues related to energy prices. Source: xStation5
FOMC conference - Less members want cuts. EURUSD below 1.15
Market Wrap: Europe attempts rebound amid hopes of restoring traffic in Hormuz 🚢
Economic Calendar: Quiet Tuesday Highlights Geopolitics and Weekly Oil Stocks (10.03.2026)
Is the FDA sabotaging medical companies? UniQure’s valuation rollercoaster
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
