The Federal Reserve Raised Its Forecasts and Its Doubts at the Same Time

By EC Assets · Published 25 March 2026 · Updated 25 March 2026

The Federal Reserve just told markets something rare: we don't know.

That's not a paraphrase. At last week's FOMC press conference, Chair Powell said that if there was ever a time to skip the quarterly economic projections, this would be it. The committee published forecasts anyway. They showed higher growth, higher inflation, and a rate cut that nobody on the committee could coherently explain.

Think about that combination. The Fed raised its GDP forecast while also raising inflation to 2.7% for 2026. Yet the dot plot still shows one rate cut this year. When asked to reconcile this, Powell offered what one observer described as the verbal equivalent of a shrug.

The backdrop makes it harder. Oil prices have surged roughly 50% since the Iran conflict began. Producer prices came in more than double expectations. And inflation was already running above target before the first missile launched. Powell was candid: progress on inflation has not been as strong as hoped.

Markets responded clearly. Futures now price in a greater chance that rates stay unchanged or even rise than that the Fed cuts this year. Before the conflict, traders expected two reductions. That expectation has evaporated.

Adding to the uncertainty: the Fed itself faces a leadership transition with no clear timeline. Powell's term as chair expires in May, but his successor's confirmation remains stalled in the Senate.

At EC Assets, we view these macro regime shifts as defining inputs for the volatility landscape that shapes institutional positioning.

When the central bank operates without visibility, certainty becomes the most expensive position in the market.