Summary of Financial Markets Reaction to Fed Decision

Author: Samir Al Khoury

Date: March 19, 2026

Overview of the Fed Decision

The Federal Open Market Committee (FOMC) held its meeting on March 18, 2026, deciding to maintain interest rates within the range of 3.50%–3.75%. This decision marks the second consecutive meeting where rates were held steady. The voting revealed that only one member, Stephen Miran, advocated for a 25 basis point cut, while the majority supported the current rate. The Dot Plot projections indicated expectations for only one rate cut this year and another next year.

Key Statements from Jerome Powell

During the press conference, Federal Reserve Chair Jerome Powell adopted a hawkish stance, emphasizing that no rate cuts would occur until inflation shows signs of decline. He reiterated the necessity of maintaining restrictive rates to achieve inflation targets. Powell also mentioned the uncertainty surrounding the economic impact of geopolitical tensions in the Middle East and acknowledged the potential for elevated energy prices to exacerbate inflationary pressures.

Market Reactions

US Equity Markets

Following the Fed's announcement, all major US indices experienced declines:

• S&P 500: -1.36% (closed at 6,625 points)
• Nasdaq 100: -1.43%
• Dow Jones: -1.95%
• Russell 2000: -1.94%

The VIX volatility index surged by 12%, indicating heightened market anxiety.

US Treasury Markets

US Treasury prices fell across all maturities, leading to higher yields:

• 2-year Treasury yield: 3.79% (up 2.75%)
• 10-year Treasury yield: 4.27% (up 1.55%)
• 30-year Treasury yield: 4.89% (up 0.87%)

Precious Metals

Gold and other precious metals saw significant declines:

• Gold: -4% (at $4,806)
• Silver: -5% (at $75)
• Palladium: -8% (at $1,456)
• Platinum: -5%

Cryptocurrencies

Cryptocurrency markets also reacted negatively:

• Bitcoin: -4% (around $70,500)
• Ethereum: -5% (around $2,150)

US Dollar Index

The US Dollar Index emerged as the biggest winner, rising by 0.65% to reach 100.31 points.

Crude Oil Prices

Crude oil prices increased by 6%, reaching $112, driven by ongoing geopolitical tensions and disruptions in the Strait of Hormuz, a critical route for global oil trade.

Technical Outlook for Nasdaq 100

The Nasdaq 100 is expected to continue its bearish trend, closing at 24,425 points, down 3% year-to-date. Technical indicators suggest:

• A bearish crossover between the 20-day and 50-day moving averages.
• Relative Strength Index (RSI) at 42, indicating negative momentum.
• A bearish crossover in the MACD line reinforcing the likelihood of continued downside momentum.

This analysis provides insights into the immediate market reactions following the Fed's decision and highlights the broader implications for various asset classes.