The Federal Reserve held interest rates steady on Wednesday, March 18, 2026. Higher energy prices from the Iran war/excursion may prolong the Federal Reserve’s year’s long inflation fight. However, the Fed stated that cutting rates this year is still on the table notwithstanding. For now, the benchmark federal-funds rate will hold between 3.5% and 3.75%, which marks the second consecutive meeting with no change. The financial analysts suggest that cutting rates while inflation is rising would be hard to justify. Before the oil shock, inflation was at least not getting worse, holding at 2%. Now, with the surge in energy costs, inflation implications could follow according to the analysts. Having said that, if the tensions in Iran ease, inflation will slowly subside, but until then, we may have to deal with higher inflation for a period of time.
Fixed mortgage rates do not track the Fed, instead they are largely tied to Treasury yields and the US economy. Due to the inflationary pressures, and the expanding situation in the Middle East, the average rate for a 30 year, fixed rate mortgage is up to 6.29% as of Tuesday, from 5.99% at the end of February. Mortgage rates are likely to remain relatively volatile as a result of global uncertainty, an unsteady economic outlook, and the Fed’s pause on rate cuts.