At its March 18–19, 2026 meeting, the Federal Open Market Committee voted 11–1 to leave the federal funds target rate unchanged at 3.50%–3.75%. This was the second consecutive hold after five cumulative cuts that began in September 2024.
The reason for holding: PCE inflation. The Fed raised its 2026 PCE inflation forecast to 2.7%, up from 2.4% projected just three months earlier in December 2025, largely attributing the upward revision to the pass-through effect of tariffs on goods prices. With inflation still running above the 2% target, the Fed signaled patience.
The short answer: Fed held at 3.50–3.75%. One cut projected for 2026. 30-year mortgage at 6.22% (Freddie Mac, March 19). Top HYSA rates at 4.21–5.00%. If you have a mortgage above 7%, consider refinancing now. If you hold cash savings, move to a HYSA before the next cut.
What the Fed Decided on March 18 — and Why
The vote was 11–1. Fed Governor Stephen Miran dissented, preferring a 25 basis point cut. The rest of the committee held firm based on three data points cited in the accompanying statement:
| Indicator | Dec 2025 Projection | Mar 2026 Projection | Direction |
|---|---|---|---|
| PCE Inflation (2026) | 2.4% | 2.7% | ↑ Revised up |
| GDP Growth (2026) | ~2.5% | 2.4% | ≈ Steady |
| Unemployment (2026) | ~4.3% | ~4.4% | ≈ Stable |
| Rate cuts projected (2026) | 2 cuts | 1 cut | ↓ Reduced |
The inflation revision is the critical number. A 30 bps upward revision — from 2.4% to 2.7% — was enough to remove one projected 2026 cut from the dot plot. The Fed is not signaling alarm; it is signaling that the last mile of the inflation fight takes longer than expected.
The Rate Journey: 0.08% to 5.375% and Back
Understanding where rates are requires knowing where they came from. The Fed began this tightening cycle in March 2022, hiking from near-zero (0.08%) to a peak of 5.25–5.50% by July 2023 — the fastest hiking cycle in four decades. After holding at the peak for over a year, the first cut came in September 2024. Five cuts later, the rate stands at 3.50–3.75%.
Federal funds rate at key FOMC milestones 2022–2026 — from near-zero to 5.375% peak, now at 3.625% midpoint after five cuts
The Fed has now cut 175 basis points from the peak. At the median projected pace — one more cut in 2026, one in 2027 — the terminal rate settles around 3.0–3.25%, representing a "neutral" stance neither stimulative nor restrictive. However, 7 of 19 FOMC participants believe no further cuts are warranted this year at all.
What This Means for Mortgage Holders
The 30-year fixed mortgage rate was 6.22% as of March 19, 2026 (Freddie Mac PMMS). The 15-year fixed was 5.54%. Mortgage rates do not move in lockstep with the Fed funds rate — they track the 10-year Treasury yield — but they have trended down from the 2023 peak above 7.7%.
Key US interest rates in March 2026 — mortgage rates remain elevated relative to the Fed funds rate, compressing the spread savers can capture
For a homeowner with a $400,000 mortgage, the difference between 6.22% and the hypothetical post-cut scenario of ~6.00% is approximately:
| Rate | Monthly Payment | Total Interest (30yr) | vs. 6.22% |
|---|---|---|---|
| 6.22% (Mar 2026) | $2,455 | $483,800 | — |
| 6.00% (post-cut est.) | $2,398 | $463,280 | –$57/mo, –$20,520 total |
| 5.50% (two cuts est.) | $2,272 | $418,920 | –$183/mo, –$64,880 total |
| 7.50% (2023 peak) | $2,797 | $607,000 | +$342/mo, +$123,200 total |
The case for refinancing now — rather than waiting for cuts — depends on your existing rate. If you locked in a rate above 7.0% during 2023, the spread between your rate and today's 6.22% is wide enough that refinancing makes mathematical sense in most scenarios, even accounting for closing costs of 2–3% of loan value.
Break-even rule of thumb: Closing costs ÷ monthly savings = months to break even. At $8,000 in closing costs and $185/month saved (refinancing from 6.75% → 6.22%), break-even is 43 months. If you plan to stay in the home more than 4 years, it's worth doing now rather than waiting for a cut that may save only $57 more.
Model your specific scenario with the Mortgage Calculator and Amortization Calculator — the amortization view is particularly useful for seeing how the total interest cost changes across rate scenarios.
The HYSA Opportunity Before the Next Cut
While mortgage holders focus on the eventual relief from cuts, savers face the opposite dynamic: every rate cut reduces the yield available on cash holdings. As of March 20, 2026, the highest available HYSA rates (Bankrate / NerdWallet data) are:
| Institution | APY | Key Condition |
|---|---|---|
| Varo Money | 5.00% | Qualifying monthly direct deposit required |
| Axos Bank | 4.21% | No minimum balance |
| Newtek Bank | 4.20% | No minimum balance |
| Wealthfront Cash | 4.20% | Brokerage account required |
| National avg (traditional bank) | ~0.50% | — |
On a $25,000 emergency fund, the difference between 4.21% (Axos) and the national average of ~0.50% is $928 per year in interest earned. That gap narrows with each Fed cut.
Use the Savings Calculator to model how much a 4.21% HYSA compounds over 1–5 years versus parking cash in a standard savings account, and the Compound Interest Calculator to see the difference over longer horizons.
The Dot Plot: One Cut in 2026 — When?
The March 2026 dot plot shows a median expectation of one 25 basis point cut in 2026, bringing the target to 3.25–3.50%. The timing is not specified — that depends on upcoming inflation and jobs data. Key events to watch:
- May 2026 FOMC (May 5–6): First opportunity to cut. Requires March and April PCE data to cooperate.
- June 2026 FOMC (June 17–18): Second opportunity. Markets currently price a roughly 60% chance of a cut by June.
- July–December 2026: Remaining meetings if the first cut is delayed.
For context, 7 of 19 participants currently expect no cuts in 2026 at all. The Fed's path is genuinely uncertain and depends heavily on whether tariff-driven inflation proves transitory or persistent.
Action Plan: What to Do Right Now
Given where rates stand and the likely trajectory, here is a prioritized checklist:
- If your mortgage rate is above 7.0%: Request refinance quotes now. At 6.22%, the monthly savings on a $400k loan versus 7.5% are $342/month — $4,104/year. Most borrowers break even in under 3 years on closing costs.
- If your mortgage rate is 6.5–7.0%: Model the break-even with the Amortization Calculator. A refinance from 6.75% → 6.22% saves ~$130/month on a $400k loan; break-even is 5–6 years depending on closing costs. Marginal, but worth knowing.
- If you hold cash savings: Move idle cash from a traditional savings account to a HYSA now. Rates will decrease with each cut; locking in today's 4.21% (or Varo's 5.00% with direct deposit) earns meaningfully more than a standard account.
- If you have an adjustable-rate mortgage (ARM): Evaluate conversion to a fixed rate. ARMs benefit from declining rates, but if the cut cycle stalls, your rate could stay elevated longer than expected.
Track the compounding value of redirecting monthly savings — whether from a refinance or HYSA interest — with the Savings Calculator and Net Worth Calculator.
Sources & Citations
Data sources: Federal Reserve Board — FOMC Statement, March 18, 2026; Federal Reserve — Summary of Economic Projections, March 2026; Freddie Mac Primary Mortgage Market Survey, March 19, 2026; Bankrate — Best High-Yield Savings Accounts, March 2026; FRED — Federal Funds Effective Rate (historical). Mortgage calculations verified using the UtilsDaily Mortgage Calculator.