The Federal Reserve is still expecting to cut interest rates once this year in spite of a spike in oil prices from the Iran war.

The central bank’s so-called dot plot, which shows the anonymous expectations of the 19 individual members, showed a median estimate of 3.4% for the federal funds rate at the end of 2026, the same as what it had projected at the end of last year.

However, a closer look at the overall dot plot showed the balance of projections moved toward fewer reductions, meaning more members are forecasting one reduction from two previously.

“If you notice, the median didn’t change, but there was actually some movement toward — a meaningful amount of movement — toward fewer cuts by people,” Fed Chair Jerome Powell said in his post-meeting remarks. “So four or five people went from two to one, let’s say, two cuts to one cut.”

The Fed kept rates unchanged on Wednesday, voting 11-1 to keep the benchmark federal funds rate anchored in a range between 3.5%-3.75%.

Traders had come into the year hopeful for two interest rate cuts. However, that expectation has been getting pushed out in recent weeks because of data showing hotter inflation that could put the central bank on hold.

In particular, it complicates the job of former Fed Governor Kevin Warsh, who is set to succeed current Chair Powell when his term ends in May. Warsh, who was handpicked by President Donald Trump, has expressed his support for lower rates.

The Fed’s Summary of Economic Projections showed higher inflation projections for the year, as well as a somewhat faster pace of growth.

The forecast for personal consumption expenditures inflation climbed to 2.7% for 2026, up from 2.4% in December. The projection for core inflation, which excludes volatile food and energy prices and is more closely watched by the Fed, also rose to 2.7% from 2.5%.

However, the change in real GDP rose to 2.4% from 2.3% in December.

Fed funds futures were last pricing in just one rate cut in 2026, as well as the greater likelihood that the central bank may remain on hold, according to the CME FedWatch Tool.

— CNBC’s Gabriel Cortes and Jeff Cox contributed to this report.