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The Federal Reserve’s March 18–19 meeting minutes will be released on Wednesday.
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The Fed maintained a cautious pause on interest rates during its March policy decision.
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Investors are now weighing the possibility of a rate cut at the upcoming May 7 meeting.
The highly anticipated minutes from the United States (US) Federal Reserve’s (Fed) March 18–19 monetary policy meeting are scheduled for release on Wednesday at 18:00 GMT. At that meeting, the Federal Open Market Committee (FOMC) unanimously voted to leave the Fed Funds Target Range (FFTR) unchanged at 4.25%–4.50%.
The accompanying Summary of Economic Projections (SEP) revealed growing uncertainty within the committee. The updated forecasts for 2025 and 2026 were revised downward, reflecting a cautious outlook. Despite this, the Fed maintained expectations for two rate cuts in 2025, signaling a continued bias toward monetary easing.
A Hawkish Pause, Amid Rising Uncertainty
Although the Fed held rates steady in March, the tone was far from dovish. Fed Chair Jerome Powell emphasized an “unusually elevated” level of uncertainty, largely attributed to new policy moves from the Trump administration, particularly the implementation of significant tariffs.
At his post-meeting press conference, Powell highlighted how these tariffs have introduced additional inflationary pressures and slowed progress toward the Fed’s 2% inflation target. He noted that the size of the new tariffs “exceeded expectations” and could complicate the central bank’s path forward.
Speaking days later in Virginia, Powell reiterated these concerns, warning that the tariff-driven inflation could combine with slower growth to create challenging conditions for policymakers. Meanwhile, Fed Governor Adriana Kugler pointed to a recent uptick in goods and services inflation as a potential early sign of tariff impacts, stressing that inflation control remains the Fed’s top priority.
FOMC Minutes: Key Focus Areas and Potential Market Impact
The release of the FOMC minutes is expected to offer deeper insights into the internal debates among Fed officials. Investors will be closely watching for any signals of a potential pause or slowdown in quantitative tightening (QT) and any further discussion of "stagflationary" risks that surfaced during the March policy review.
Market participants are also seeking clues on how US tariff policy is shaping the Fed’s monetary outlook. Should the minutes reveal deeper concern about inflationary pressures or economic softening, the US Dollar (USD) could come under renewed pressure.
US Dollar Outlook: Technical Picture Turning Bearish
The US Dollar Index (DXY) remains vulnerable to further declines if current bearish momentum holds. Key support is seen at 101.26, the low from April 3, followed by the 2024 trough at 100.15 and the psychologically significant 100.00 mark.
On the upside, any short-term recovery could be capped near 104.68—the March 26 high—and the 200-day Simple Moving Average at 104.83. Unless DXY clears this resistance zone, the broader downtrend is expected to continue.
Technical indicators also signal ongoing weakness. The Relative Strength Index (RSI) hovers around 42, while the Average Directional Index (ADX) sits near 37, both suggesting that bearish pressure may intensify in the near term.
