Fed Minutes to reveal details on March rate pause and upcoming moves amid Trump’s tariffs

• The Minutes of the Fed’s March 18-19 gathering are due on Wednesday.
• The Federal Reserve delivered a cautious hold at its March event.
• Investors contemplate a potential rate cut at the May 7 meeting.

The eagerly awaited minutes from the United States (US) Federal Reserve’s (Fed) March 18-19 monetary policy meeting are set for release on Wednesday at 18:00 GMT. During the gathering, policymakers agreed to keep the Fed Funds Target Range (FFTR) unchanged at 4.25%-4.50%.

The latest Summary of Economic Projections (SEP) update highlighted a palpable sense of uncertainty within the Federal Open Market Committee (FOMC).

Indeed, their revised outlook for 2025 and 2026 was notably pared back, signaling caution among policymakers. Yet, despite the more conservative expectations, the Fed’s forecast still anticipated two cuts to the federal funds rate in 2025, underscoring a continued commitment to monetary easing.

The Fed delivered a hawkish hold, and Powell confirmed it

In a decisive move, the Federal Open Market Committee unanimously voted to hold the policy rate steady this March. Yet, two issues dominated the discussions: a cloud of uncertainty and the looming impact of US tariffs.

In his routine press conference, Federal Reserve Chair Jerome Powell characterized the uncertainty as “unusually elevated.” He explained that central bank officials were wrestling with major challenges in updating economic projections amid a flurry of new policy moves from the Trump administration. Powell warned that the Fed could face delays in pushing forward its inflation targets, as inflation had begun to climb—an effect he attributed, at least in part, to the tariffs.

Speaking to business journalists in Virginia on April 4, Powell remarked that President Donald Trump’s new tariffs proved to be “larger than expected.” He painted a picture of an economic landscape where rising tariffs could trigger higher inflation and slower growth, potentially pushing the central bank into a series of tough decisions.

Adding to the conversation, Federal Reserve Governor Adriana Kugler observed that the recent surge in goods and market-services inflation might be a prelude to the full impact of the tariffs. She stressed that despite the shifting economic tides, the Fed’s paramount priority must remain keeping inflation in check.

When will FOMC Minutes be released and how could it affect the US Dollar?

The FOMC is set to release the Minutes from its March 18-19 policy meeting at 18:00 GMT on Wednesday, and market watchers are bracing for key insights.

Participants will be particularly alert for any hints regarding a slowdown in the pace of quantitative tightening (QT) and for discussions that led rate setters to project “stagflationary” scenarios on their updated “dots plot”.

Chair Powell reassured that the economy remains well positioned, although growing uncertainty and a potential slowdown in economic activity could put pressure on the US Dollar (USD). The debate over the probable impacts of US tariffs is also expected to feature prominently.

At a recent briefing, Senior Analyst Pablo Piovano of FXStreet offered an outlook on the US Dollar Index (DXY).

He argued, “In case sellers regain the upper hand, the index should meet its immediate contention at its 2025 bottom of 101.26 (April 3) and further down at the 2024 trough of 100.15 (September 27), just shy of the crucial 100.00 level.”

“Occasional bouts of strength, on the other hand, should initially find resistance at the weekly peak of 104.68 (March 26), an area just below the critical 200-day Simple Moving Average at 104.83. While below that level, extra losses in DXY should remain well on the cards,” he added.

Piovano also noted that momentum indicators hint at further near-term retracements—with the daily Relative Strength Index hovering around the 42 region and the Average Directional Index near 37, suggesting that the current trend might be gathering additional force.