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Macroeconomic Score 78 Cautious

Fed Still Expected to Cut Rates Despite Oil-Driven Inflation Spike

Mar 18, 2026 12:17 UTC
CL=F, ^VIX, US10Y
Medium term

A CNBC Fed Survey reveals that despite rising inflation fueled by oil prices at $88 per barrel, rate cuts are still anticipated this year. Market participants remain divided on the timing and pace of monetary easing.

  • 32 economists, fund managers, and analysts surveyed by CNBC
  • Oil prices projected at $88 per barrel six months from now
  • Fed still expected to cut rates in 2026 despite inflation uptick
  • CL=F, US10Y, and ^VIX are key indicators being monitored
  • Energy, utilities, and materials sectors are most impacted
  • Inflation concerns driven by elevated oil prices

The Federal Reserve is still expected to lower interest rates in 2026, according to a CNBC survey of 32 economists, fund managers, and analysts, even as high oil prices contribute to a recent uptick in inflation. The survey highlights growing concern over inflationary pressures stemming from energy markets, with respondents projecting oil prices to average $88 per barrel six months from now. This level points to sustained supply constraints or geopolitical tensions affecting global crude markets. The persistent inflation risk poses a challenge to the Fed’s path toward rate cuts, increasing uncertainty around the timing and magnitude of policy adjustments. While the central bank has signaled a potential shift from its restrictive stance, elevated energy costs could delay or moderate any easing. The survey underscores that market participants are closely watching oil's trajectory, particularly via CL=F, as a key determinant of inflation dynamics. Bond markets appear sensitive to the outlook, with the 10-year U.S. Treasury yield (US10Y) reacting to shifts in inflation expectations. Meanwhile, increased volatility is reflected in the VIX (^VIX), which has climbed as investors recalibrate their views on monetary policy. The energy, utilities, and materials sectors are likely to be most affected by ongoing price volatility and shifting rate expectations.

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