Live updates on March Fed rate decision

Federal Reserve Chairman Jerome Powell will continue to assert that inflation is moving closer to the central bank's 2% target, even after the recent tepid inflation readings.

“The other thing is that in the second half of the year, you had some less metrics, so that 12-month window may be difficult to move forward,” Powell said.

“However, we are looking for data that confirms the lower readings we had last year,” Powell continued. “What we've seen give us more confidence that inflation is actually moving steadily up to 2%.”

– Sarah Min

Key inflation data points — the consumer price index and personal consumption spending — rose for both January and February. Federal Reserve Chairman Jerome Powell sees the data as further evidence of a downward spiral in inflation.

“I don't think they've really changed the overall story, inflation is moving gradually towards 2% on a bumpy road at times,” he said at a press conference on Wednesday afternoon. “We're not going to overreact to these two months of data, and we're not going to ignore them.”

– Lisa Kailai Hahn

In response to the Federal Reserve's decision to keep rates on hold, Seema Shah, chief global strategist at Principal Asset Management, said, “Powell may have shown his cards: He needs a good reason not to cut rates, rather than a reason to cut rates. Markets probably couldn't have asked for more from the central bank.” Shares celebrate.”

“The Fed really likes its soft-landing outcome. Strong growth, low unemployment, high inflation — yet no change in the midpoint,” Shaw continued. He stressed that cutting rates before inflation is close to the central bank's 2% target, and even if GDP growth is above trend, it is a “dangerous path”.

— Biya Singh

Federal Reserve Chairman Jerome Powell and the central bank aren't fazed as inflation proves stickier, said David Russell, global head of market strategy at investment platform TradeStation. And the prospect of three further interest rate cuts this year is reassuring, he said.

“There were some inflationary bumps this year, but Jerome Powell didn't blink,” Russell said. “Investors are relieved to see the three cuts remain in the dot plot, supporting markets and risk appetite.”

“The Fed may have woken up with a hangover, but the punchbowl isn't gone yet,” he said.

– Alex Haring

Federal Reserve Chairman Jerome Powell said the central bank had not yet reached a decision on how to reverse the pace of its balance sheet reduction, but he noted that an adjustment was not far off.

“The general feeling of the committee is that it is appropriate to reduce the run-off speed as soon as possible, consistent with the plans we have previously presented,” Powell said.

The shape of the balance sheet run-off plan can affect supply in the bond market and is closely monitored by fixed income traders.

– Jesse Pound

Federal Reserve Board Chairman Jerome Powell reiterated Wednesday that policymakers want to cut rates by the end of the year, assuming economic growth continues.

“We believe our policy rate is likely to be at the peak for this type of cycle, and if the economy evolves broadly as expected, it would be appropriate to begin easing policy control at some point this year,” Powell said.

He also reiterated his confidence in the central bank's target inflation rate of 2%.

— Biya Singh

According to Sonu Varghese, global macro strategist at the Carson Group, three interest rate cuts in 2024 could be taken as a positive sign, even if the central bank kept it unchanged at its March meeting.

“The details are particularly bad because they leave rate cuts on the table even when forecasting slightly higher inflation and higher economic growth,” Varghese said.

– Alex Haring

The report for the Federal Reserve's March meeting is out. Click here to compare CNBC's Wednesday report to the most recent meeting in January.

– Alex Haring

Major averages rose on Wednesday afternoon after the Federal Reserve released its policy decision and rate forecast.

The S&P 500 rose 0.3%, and the Nasdaq Composite rose 0.5%. The Dow Jones industrial average advanced more than 140 points, or nearly 0.4%.

–Darla Mercado

All three major averages were close to flatline as investors braced themselves for the Federal Reserve's interest rate decision.

The S&P 500 was down 0.06%, while the Nasdaq Composite was down 0.08%, as of 1:36 p.m. ET. The Dow Jones industrial average fell roughly 6 points, or 0.02%.

Treasury yields were also flat before the Fed's announcement. The rate on the 2-year Treasury fell less than 2 basis points to 4.675%. The 10-year yield also fell less than 2 basis points to 4.279%.

–Darla Mercado

The Fed's stance on interest rates and how it will proceed is foremost on investors' minds, but the Federal Reserve can't forget its balance sheet.

The Fed is running on its $7.6 trillion in Treasuries, mortgage-backed securities and other assets — and that could soon run out and eventually end up on its balance sheet. Now, the Fed allows up to $60 billion a month in Treasurys without reinvesting its balance sheet, along with $35 billion in mortgage-backed securities.

Investors will be looking for details on how the Fed will wind down its balance sheet, which Fed Chair Powell may address during his news conference.

Read more about the Fed's balance sheet here from CNBC's Jeff Cox.

–Darla Mercado, Jeff Cox

This latest cycle marks two years since the Federal Reserve first raised interest rates, and the move has had a significant impact on consumers' wallets.

Since the central bank started raising rates in March 2022, borrowers have had to pay more in interest costs. For the week of March 11, 2022, the 30-year fixed mortgage was 4.29%, compared to 7.09% for March 15, 2024, according to MND.

Carrying debt on credit card balances became more expensive, with annual percentage rates rising from 16.34% to 20.75%, as the bank took its tough stance on bank accounts two years ago.

While times have gotten tough for borrowers, savers and fixed income investors are reaping the benefits of higher rates.

For starters, the yield on the 2-year Treasury is now at 4.67%, up from 1.75% in March 2022, according to Refinitiv. Parking money in certificates of deposit is also more rewarding, with the annualized percentage yield on 6-month CDs rising from 0.22% to 3.298%, according to LendingTree.

–Darla Mercado, Nick Wells

Central bank policymakers are widely expected to keep interest rates on hold at the end of their March policy meeting, but the dot plot will be the key event for traders.

The policy-setting Federal Open Market Committee will release its point projection, a breakdown of individual members' expectations for interest rates moving forward.

Investors began 2024 with a bullish outlook on interest rate cuts, expecting the Fed to cut interest rates six or seven times in quarter-percentage-point increments. But those expectations have turned into reality, with investors now expecting rates to fall first in June and they predict just three cuts.

The change in the Street's forecast comes as economic data shows that inflation is harder to contain than many had expected.

Read more from CNBC's Jeff Cox on what to expect from the Fed's meeting.

–Darla Mercado