Fed holds federal funds rate at 3.5%-3.75% as geopolitical risks cloud outlook

The Federal Open Market Committee said on Wednesday it will keep the federal funds rate unchanged at 3.5%-3.75% while assessing the economic effects of the ongoing Middle East conflict. Chair Jerome Powell said growth remains solid and consumers are resilient, but housing is weak, the labor market is softening and inflation is still above the 2% goal. Market pricing for the April 2026 meeting shows 97% expect no change and 3% expect a 25-basis-point hike.