Fed Officials Split on Next Move: Some Push for Cuts, Others See Case for Hikes
The March FOMC minutes, released April 8, show a Federal Reserve pulled in two directions -- officials worried about labor market damage from the Iran conflict want rate cuts, while others see oil-driven inflation as grounds for rate hikes.
The Federal Reserve released the minutes of its March 17-18 meeting on Wednesday, revealing the sharpest internal disagreement on rate direction since the central bank began cutting in September 2024. With the federal funds rate held at 3.50%-3.75% for a third consecutive meeting, officials are no longer debating how fast to cut -- they are debating whether to cut at all.
The Decision
| March 2026 | |
|---|---|
| Target range | 3.50% - 3.75% |
| Decision | Hold (near-unanimous) |
| Dissent | Stephen Miran preferred a 25bp cut |
| Rate since Dec. 2025 | Unchanged (3 meetings) |
| Total cuts from peak | 175bp (from 5.50%) |
Almost all participants supported holding rates steady, but the discussion beneath the vote revealed a committee pulled in opposite directions by two competing risks.
The Cutting Camp
Many participants judged that "it would likely become appropriate to lower the target range" if inflation continued declining toward 2%. Their concern was labor: most participants were worried that "a protracted conflict could lead to further labor market softening, which could warrant additional rate cuts."
The staff's own projections supported this caution. The economic outlook was "not as strong as the outlook for the January meeting," with unemployment expected to remain near current levels through 2027 -- a projection that assumed the conflict's effects would be modest. If the conflict proves more damaging than the staff assumed, the case for cuts strengthens.