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Macro Score 85 Neutral to slightly positive

Fed Holds Course on Rate Cuts Amid Rising Oil Prices

Mar 18, 2026 18:59 UTC
CL=F, ^VIX, TLT
Short term

Despite a surge in oil prices, the Federal Reserve maintains its expectation of one rate cut this year, signaling confidence in its inflation control and economic soft landing strategy. The move supports equity markets and weighs on bond yields.

  • Fed maintains expectation of one rate cut in 2026
  • Median federal funds rate estimate: 3.4%
  • Rate projection unchanged from end of last year
  • CL=F shows rising oil prices
  • ^VIX reflects elevated market volatility
  • TLT indicates bond market resilience

The Federal Reserve has reaffirmed its projection of a single rate cut in 2026, even as oil prices spike, reflecting sustained confidence in inflation trends and economic resilience. The central bank's dot plot, released after the latest meeting, shows a median federal funds rate estimate of 3.4%, unchanged from the end of the previous year. This consistency underscores the Fed's determination to monitor inflation closely while avoiding premature easing. The stability in rate expectations comes amid rising energy costs, with CL=F, the benchmark crude oil futures contract, showing upward pressure. Market volatility, as measured by ^VIX, remains elevated but has not altered the Fed’s path. Treasury bond prices, tracked by TLT, have reacted with modest gains, indicating investor reassurance in the Fed’s disciplined stance. The outlook supports risk assets, particularly equities, while keeping long-term borrowing costs under control.

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