The Federal Reserve released minutes from its February and March discount rate meetings, confirming all 12 Reserve Banks voted to hold the primary credit rate at 3.75%.
The minutes cover Board meetings on February 9 and March 18, 2026. Both sessions ended with no sentiment expressed for changing the rate.
Why the Fed Held Federal Reserve Interest Rate Steady
At the March 18 joint meeting with the Federal Open Market Committee (FOMC), officials maintained the federal funds target range at 3.5% to 3.75%. The Board also approved keeping interest on reserve balances at 3.65%.
Federal Reserve Bank directors reported stable economic conditions across most districts. Labor markets showed limited hiring, low turnover, and modest wage growth. However, several districts flagged difficulty hiring for specialized roles, particularly in healthcare.
Directors also noted sustained business investment in technology and AI to boost efficiency. Yet AI’s direct impact on labor remained limited so far.
Tariff Pressures Ease, but Costs Linger
While tariff-related price pressures had moderated compared to earlier assessments, directors highlighted rising nonlabor costs in healthcare and energy.
The Board renewed existing formulas for secondary and seasonal credit programs, keeping the secondary rate at 4.25%, or 50 basis points above primary credit.
Chair Jerome Powell, Vice Chair Philip Jefferson, and all present governors voted unanimously at both meetings.
Governors Christopher Waller and Stephen Miran were absent from the February session but participated in March.
The continued rate hold signals the Fed remains cautious about easing further despite market expectations for cuts later this year.
Traders will now watch upcoming inflation data to gauge whether the FOMC shifts its stance at future meetings.
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