FX.co ★ Fed Signals Openness to Rate Hikes

Minutes from the March FOMC meeting showed that several Federal Reserve officials preferred to present future rate decisions in a two-sided manner, emphasizing that further increases could be appropriate if inflation remains above target. The vast majority of participants judged that upside risks to inflation and downside risks to employment were elevated, and most noted that these risks had intensified due to developments in the Middle East. They warned that a prolonged conflict in the region could lead to more persistent increases in energy prices, with higher input costs more likely to pass through to core inflation. In line with expectations, the Fed left the federal funds rate unchanged at 3.5%–3.75% for a second consecutive meeting in March 2026. Policymakers still projected one cut in the federal funds rate this year and another in 2027, although the precise timing of those moves remains uncertain.