Jakarta, CNBC Indonesia – Global market participants are awaiting the outcome of the Federal Open Market Committee (FOMC) meeting of the U.S. Federal Reserve (The Fed), scheduled for announcement early Thursday morning Indonesia time at 01:00 WIB, following meetings on March 17-18, 2026.
In addition to the interest rate decision, markets are also anticipating the latest signals regarding the future direction of U.S. Monetary policy, particularly amid rising global energy prices due to conflict in the Middle East and a slowing U.S. Economy.
The Fed’s decisions consistently draw significant attention from global financial markets due to their substantial influence on the movement of the U.S. Dollar, global capital flows, bond yields and exchange rates in emerging markets.
This week’s meeting is particularly crucial as it takes place against the backdrop of escalating tensions in the Iran-Israel-United States conflict. The war has driven up oil prices and raised concerns about accelerating U.S. Inflation. This presents a critical juncture for the Fed.
With its primary mandate to maintain price stability, the Fed’s decision will have far-reaching consequences for the U.S. And the world. As the central bank of the world’s superpower, its policies have a significant impact, especially on financial markets.
The Fed maintained its current interest rate stance at its January meeting, a pattern widely expected to continue.
Data from the CME FedWatch Tool indicates that 98.9% of market participants anticipate the Fed will hold its benchmark interest rate in the 3.50%-3.75% range at this meeting, with any future adjustments heavily dependent on incoming economic data.
This expectation mirrors the outcome of the January meeting, where the Fed held rates steady while emphasizing that subsequent steps would be contingent on economic developments.
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Foto: CME FedWatch Tool
Meeting Probabilities
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Here are some key areas market participants are focusing on ahead of the Fed’s announcement:
1. Interest Rates
The primary focus remains on the interest rate decision. Market consensus suggests the Fed will likely maintain its benchmark rate within the 3.50%-3.75% range.
However, the direction of future policy is currently more important than the immediate decision. The Fed faces a complex situation.
While inflationary pressures have eased, they haven’t entirely dissipated. U.S. Consumer price inflation registered at 2.4% year-over-year in February 2026, while core inflation remained at 2.5%. The Fed’s preferred inflation measure, the PCE, stood at 2.8% in January 2026, with core PCE at 3.1%.
This limits the scope for near-term rate cuts. Simultaneously, the case for further rate hikes remains unconvincing.
The situation is further complicated by rising energy prices stemming from the Middle East conflict, which could hinder the decline in inflation. Some market participants believe the Fed may hold rates steady for longer than previously anticipated.
Goldman Sachs recently revised its forecast, now projecting rate cuts to begin in September 2026, later than its prior expectation of June.
2. Updated Economic Projections
Alongside the interest rate decision, market participants are awaiting updated economic projections from the Fed. During the March meeting, the U.S. Central bank will release its latest forecasts for economic growth, inflation, and the unemployment rate.
The Fed’s previous projections, released in December 2025, anticipated U.S. Economic growth of 2.3% in 2026, with an unemployment rate of 4.4%. Inflation, as measured by PCE, was projected at 2.4%, and core PCE at 2.5%.
However, economic conditions have shifted since those projections were released. Growth has slowed, the labor market has weakened, and the risk of rising energy prices has re-emerged due to the conflict in the Middle East.
the market is now focused on whether the Fed will revise down its growth forecasts, increase its inflation projections, or both.
3. Dot Plot
The Fed’s dot plot is also under close scrutiny.
The dot plot is important since it provides insight into the range of potential rate cuts still available to the Fed, not just for this year but for several years ahead.
The December 2025 FOMC dot plot revealed projections from 19 Fed members. For 2026, the data indicated a cautious outlook among Fed officials.
Only one member signaled the need for further rate cuts, while most others leaned towards maintaining rates at relatively high levels.
 Foto: The Federal ReserveDot Plot (Desember 2025)
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At this FOMC meeting, the market will be watching to see if the latest dot plot maintains the cautious stance seen in December 2025, or signals a different outlook, including the possibility of holding rates steady for longer or even opening the door to rate increases if inflationary pressures resurface due to rising energy prices amid the ongoing conflict.
4. The Fed’s Statement
The Fed’s official statement will also be closely watched, as the market seeks to understand whether the central bank is now placing greater emphasis on inflation risks or is becoming more concerned about economic slowdown.
The surge in oil prices, briefly exceeding $100 per barrel due to the Middle East conflict, has heightened concerns about renewed price pressures. Even minor changes in the wording of the Fed’s statement could significantly impact the U.S. Dollar, U.S. Government bond yields, and risk assets.
5. Jerome Powell’s Press Conference
Following the announcement, attention will shift to a press conference with Fed Chair Jerome Powell.
According to the Fed’s official calendar, the FOMC results are scheduled for release at 2:00 PM Eastern Time, with the press conference to follow at 2:30 PM Eastern Time, or approximately 01:00 WIB and 01:30 WIB Thursday morning Indonesia time.
Powell often provides insights not explicitly detailed in official documents. As such, the press conference is a highly anticipated event for market participants.
Powell’s often unpredictable remarks frequently move financial markets, providing investors with new considerations and helping them gauge the future direction of Fed policy.
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