Fed Leaves Rates Unchanged Amid Uncertainty Around Iran War Implications

02:29 PM EDT, 03/18/2026 (MT Newswires) -- The Federal Reserve kept its benchmark lending rate steady Wednesday, saying the ongoing Middle East conflict poses uncertainty to the US economic outlook.

The central bank's Federal Open Market Committee left interest rates unchanged in a range of 3.50% to 3.75%, in line with Wall Street's expectations and marking its second consecutive pause. Last year, the FOMC delivered three back-to-back 25-basis-point cuts amid concerns about the labor market.

"The implications of developments in the Middle East for the US economy are uncertain," the FOMC said Wednesday following its two-day meeting.

Several Gulf countries have been impacted by the US-Israel war with Iran that started at the end of last month. The crucial Strait of Hormuz remains effectively closed, disrupting supplies and triggering inflation concerns.

The FOMC reiterated that job gains in the US remained low, while inflation continues to be "somewhat elevated."

The unemployment rate has been "little changed" in recent months, the committee said Wednesday, compared with its remarks in January that the rate had shown some signs of stabilization.

Earlier in the day, official data showed that US producer prices rose at the fastest pace in seven months in February amid notable spikes in wholesale costs of food and energy. Last week, a government report showed that annual consumer inflation held steady last month.

Earlier this month, government data showed that US employment unexpectedly fell in February and the jobless rate ticked higher to 4.4%.

Fed Governor Stephen Miran dissented from the majority at the latest meeting, preferring to reduce rates by a quarter percentage point, the FOMC said Wednesday.

"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," the FOMC said, reiterating its previous stance.

Policymakers' next meeting is scheduled for April 28-29.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.