If bettor projections are any guide, the Federal Reserve could hold interest rates steady in the 3.50%–3.75% range on March 18, as war-driven energy prices and rising inflation expectations box policymakers into inaction.
Bitcoin (BTC) is trading near $74,000 after briefly touching $76,000 on Tuesday. Markets have fully priced in a hold, but volatility persists around the rate announcement and Chair Jerome Powell’s press conference.
War, Oil, and a Central Bank With No Good Options
The March FOMC meeting takes place against a backdrop with no modern precedent. Iran’s closure of the Strait of Hormuz choked roughly one-fifth of global oil supply.
Multiple missile strikes on Tel Aviv pushed energy prices to multiyear highs, with US diesel hitting $5 per gallon.
Against these backdrops, the CME FedWatch Tool shows near-total certainty of a hold, placing 98.9% odds on no change and 1.1% on a hike.
Major banks echo that consensus, such that:
- Barclays expects the dot plot to signal one 25-basis-point cut in 2026 with higher inflation forecasts.
- Bank of America projected a likely 8–2 vote with dovish dissents from Governors Stephen Miran and Christopher Waller.
- Deutsche Bank similarly anticipates a steady hold, citing uncertainty in the Middle East.
As of this writing, Bitcoin was trading for $74,046, after a modest correction from the $76,000 intra-day high recorded on Tuesday.
Crypto Traders Brace for Powell’s Tone
According to crypto analyst 0xNobler, a rate below 3.75% would send markets into a parabolic rally, while anything above would trigger a sharp selloff.
Meanwhile, Max Crypto highlights the impending impact of the US-Iran war on short term inflation, noting that more hawkishness could see risk-on assets fall.
“Since the US-Iran war broke out, the short-term inflation expectations are going up… If he signals any more hawkishness, the risk-on assets could dump,” wrote Max.
Elsewhere, analyst Limitless argues that the Fed faces a lose-lose scenario, in that:
- Holding rates or turning hawkish would drain liquidity, but
- Signaling cuts would weaken the dollar and push energy costs higher.
Traders have priced in zero rate cuts for the remainder of 2026, a signal that markets expect prolonged tightness.
What Comes Next
Powell’s remarks on the dot plot and the Summary of Economic Projections will carry more weight than the rate decision itself.
Any shift in the median dot from one projected cut to zero for 2026 could reprice risk assets sharply.
With oil nearing $100 again, inflation sticky, and no historical playbook for wartime rate decisions, the Fed’s next moves remain the dominant variable for crypto markets heading into Q2.
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