The Fed is likely to hold rates steady with volatile oil prices and poor US jobs performance

"The Fed has a near-total chance of holding rates. It's likely that the Fed will take a conservative approach to monetary policy in March. Holding rates steady could help control inflation. The ongoing Iran war has raised the price of gas and oil - something that's likely to impact everything from plane tickets to grocery costs over the next several months unless the situation improves."

"The Strait of Hormuz - a major trade throughfare between the Persian Gulf and the Gulf of Oman - has been largely closed by Iran's leadership since early March. The move is cutting off about 20% of global oil production, causing market volatility. Oil prices recently surged past $100 a barrel, and while they've calmed slightly, the key commodity is still far more expensive than it was before the war."

"At the March meeting, Fed leaders will consider the dismal February job growth report, steady inflation rate up through last month, first-quarter business outlook, and the budding energy and oil crisis in Iran. This is also Jerome Powell's second-to-last meeting as chair. He's set to be replaced by ex-Wall Streeter and Trump appointee Kevin Warsh in May if Warsh is confirmed by the Senate."

The Federal Reserve is expected to maintain interest rates at its March 2026 meeting amid economic uncertainty. The central bank cut rates three times in late 2025 and planned additional cuts for 2026, but current conditions warrant caution. February job growth disappointed, inflation remains steady at 2.4% year-over-year, and an escalating Iran conflict has disrupted global oil supplies. Iran's closure of the Strait of Hormuz has cut approximately 20% of global oil production, pushing oil prices above $100 per barrel. These energy price increases will likely ripple through consumer costs for transportation and groceries. Jerome Powell's tenure as Fed chair is ending, with Trump appointee Kevin Warsh expected to take over in May pending Senate confirmation.

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