Federal Reserve meeting minutes: Approved unanimously to keep interest rates unchanged; the outlook for rate cuts depends on the direction of inflation

The U.S. Federal Reserve Board released the minutes of the discount rate meetings on February 9 and March 18, confirming that all 12 Federal Reserve Banks unanimously approved the decision at both meetings, keeping the primary credit rate unchanged at 3.75%. At the joint meeting on March 18 with the Federal Open Market Committee (FOMC), officials also simultaneously maintained the target range for the federal funds rate at 3.5% to 3.75%, while the interest rate on reserve balances remained at 3.65%.

Key observations behind keeping rates unchanged

Regional reports from the Federal Reserve Banks reveal the specific reasons officials chose to hold steady:

Four key bases for the Fed to maintain interest rates

The labor market is stable but shows structural divergence: In most regions, overall hiring remains constrained and employee turnover is low, while wage growth is moderate; however, hiring for certain specialized positions such as healthcare continues to be difficult, indicating imbalances within the labor market

AI investment keeps expanding, but its impact on employment is currently limited: Companies generally increase their investment in technology and artificial intelligence, yet officials explicitly noted that AI’s direct impact on the labor market is still limited and is not enough to change the policy direction

Tariff-related pressure eases, but non-labor costs keep rising: Price pressures related to tariffs have been somewhat relieved compared with the prior assessment, but non-labor costs in healthcare and energy areas are still increasing, suggesting that structural inflation pressures remain

The credit rate framework stays tight: The secondary credit rate remains at 4.25%, which is 50 basis points higher than the primary credit rate; the overall credit environment has not loosened

Policy signals from meeting attendance and voting consistency

Board member Christopher Waller and Steven Miran were absent from the February meeting, but both attended and participated in the March voting, and the result was again unanimous approval. Both meetings ended with 100% consistency; no member raised any view on adjusting interest rates, sending the market a clear signal of a highly stable policy stance and no expectation of a sudden shift in the near term.

Rate-cut outlook: The Fed is cautious, and the market waits for inflation data

Although markets generally expect the Fed to begin rate cuts later in 2026, the core message of these meeting minutes is that the Fed remains cautious about further easing of monetary policy. The concerns of policymakers center on the fact that non-labor costs—such as those in healthcare and energy—are still rising, and that inflation pressure has not fully dissipated, making an early rate cut a risk.

Traders’ focus has now shifted to the inflation data that will be released soon. If inflation continues to cool, the probability that the FOMC will change its stance at subsequent meetings will rise; if structural cost pressures persist, the pattern of keeping rates unchanged may last longer.

Frequently asked questions

Why did the Fed keep rates unchanged in March 2026?

There are three core reasons: the labor market as a whole remains stable and there are no signals indicating an urgent need for stimulus; non-labor costs in healthcare and energy areas are still rising; and although tariff pressure has eased, there is still uncertainty due to structural inflation factors. Against this backdrop, officials consider the risk of an early rate cut not to be ignored.

What does unanimous approval by all 12 Federal Reserve Banks mean?

Unanimous consistency indicates a high degree of consensus within the Federal Reserve System on the current monetary policy stance, with no member raising objections to rate cuts. This typically sends the market a clear signal of short-term policy stability, reducing uncertainty; at the same time, it also means that more solid evidence of inflation cooling is needed before any rate cut.

Why didn’t the rapid growth in AI investment lead the Fed to cut rates?

In the meeting minutes, Fed officials clearly stated that although companies’ AI investment continues to expand, its measurable impact on employment and overall productivity is currently still limited and has not reached the macro threshold required to change the direction of monetary policy. Therefore, it does not constitute sufficient grounds for a rate cut.