The Federal Reserve held interest rates steady on Wednesday and raised its 2026 inflation forecast as Chair Jerome Powell warned that surging oil prices from the Iran conflict will keep borrowing costs elevated for households well into the year.
The Federal Open Market Committee (FOMC) voted 11-1 to keep the benchmark federal funds rate at 3.5%-3.75% for the second consecutive meeting. But the real shift came in the central bank's updated economic projections, where officials now expect headline and core inflation to hit 2.7% by the end of 2026, up sharply from the 2.4% projected in December.
