FED to Release Meeting Minutes at 03:00 Beijing Time

Summary

The Federal Reserve released its latest meeting minutes, revealing a split among officials on the future path of interest rates. While some members support further rate cuts if inflation decreases, others prefer to maintain current rates for an extended periodrttnews. The Fed kept the federal funds rate unchanged at 3.50-3.75% after its January meeting, emphasizing that policy is not predetermined and will adapt to incoming datarttnews. Prior to the release, markets were anticipating potential rate cuts starting in June, with expectations for two to three cuts in 2026Zhitong+ 2.

Impact Analysis

So the minutes are out, and the key takeaway is the Fed is openly divided. While some officials are open to cuts if inflation cools, a significant camp wants to hold rates steady for an extended periodrttnews. This pushes back against the market’s dovish consensus, which was pricing in a June cut and 2-3 cuts this yearZhitong+ 2. They’re basically telling the market not to get ahead of itself.

This is a bullish signal for the US dollar. It was already catching a bid from strong data and safe-haven flowsFX678+ 2, and now it has a fundamental tailwind. The path to a June cut just got murkier. The division means volatility will spike around every data release, but the immediate reaction is that the bar for easing is higher than we thought. This reinforces a long USD position against currencies with more dovish central banks.