New Fed "Dot Plot" Sends Markets Sliding

Wednesday, March 18th, 2026

Major market indexes all took a slide this afternoon — already trading in the red as of the news release from the latest Fed meeting on interest rates — largely on comments from Fed Chair Jerome Powell regarding interest rate cuts not necessarily forthcoming. This is in the wake of uncertain global economic developments and higher-than-expected inflation reports, including this morning’s Producer Price Index (PPI) for February.

As a result, indexes closed at session lows: the Dow -768 points, -1.63%, the S&P 500 -91 points, -1.36%, the Nasdaq -327 points, -1.46% and the small-cap Russell 2000 -41 points, -1.65%. All indexes are down month-to-date, without a lot of bright light shining in the distance.

Fed Keeps Interest Rates at +3.50-3.75%, as Expected

There was no change in interest rates from this week’s Federal Open Market Committee (FOMC) meeting this afternoon, with the committee keeping rates at +3.50-3.75%, where they’ve been since December. Only one voting member dissented, Fed Governor Stephen Miran, who again called for a 25 bps rate cut.

The FOMC considers the overall U.S. economy continues to move along at a solid pace. That said, the Fed’s new dot-plot calls for just one rate cut this year and one in 2027. The long-run neutral rate has bumped up 10 basis points (bps) to +3.1%. Needless to say, we remain off-target from Powell’s optimal inflation rate of +2.0%.

Of course, Powell’s tenure is likely close to its conclusion, with former Fed governor (and often dissenting vote in Ben Bernanke’s Fed) Kevin Warsh already waiting in the wings. However, an investigation about misappropriated funds at the Fed — subpoenas of which were quashed by a federal judge just last week — and a congressional protest threatened if the DOJ does not drop its investigation (my, how “Reality TV” it all is!) are keeping things murky, to say the least. Powell said today he would stay on in a “pro-tem” basis if Warsh is not confirmed to replace him.

Back to the breakdown of this FOMC meeting, seven Fed members advocated holding rates steady this year, with no raises or cuts. Twelve members said they want at least one 25 bps-cut by the end of 2026, while five members are looking for two or more cuts. In Powell’s words, however, “If we don’t see progress on inflation, we won’t see a rate cut.” And: “Higher energy prices will push up overall inflation in the near term.”

The FOMC sees inflation ticking up from the last dot-plot: +2.7% for the March meeting, up 30 bps from +2.4% from December. Core is also +2.7%, up 20 bps from the last print. Powell stated, “We have seen more supply shocks to the market in the last five years than in many years before that.” He’s obviously citing the Iran war, Russia’s invasion of Ukraine in 2022, and the Covid pandemic from 2020 and beyond, to name just a few.

Micron Destroys Earnings Estimates in Q2

Zacks Rank #1 (Strong Buy)-rated Micron Technology MU blew away Zacks estimates this afternoon in its fiscal Q2 earnings report released after the closing bell. Earnings of $12.20 per share were more than 7x higher than the company’s year-ago tally of $1.56, while revenues were nearly 3x where they were in fiscal Q2 last year. Non-GAAP Gross Margins reached +74.9%, nicely higher than the +68.9% projected.

Guidance for the ongoing Q3 is at least as good: +50% on earnings to $19.15 per share (+/- 40 cents) and roughly +35% on revenues to $32.5 billion (+/- $740 million). The AI trade has clearly been very good for Micron. Shares initially dipped -1.2% on the news, but are back up slightly at this hour. The stock has gained nearly +62% since the start of this year.

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