Fed preview: Return of the hawks…
- Fed expected to leave interest rates unchanged
- Updated dot plot, Powell and economic projections in focus
- Traders are pricing in only one rate cut in 2026
- Over the past year USDInd has moved ↑ 0.4 % or ↓ 0.3% post Fed
- Bitcoin, Indices & XAUUSD to see heightened volatility
The Federal Reserve is widely expected to leave interest rates unchanged when it meets this evening.
However, the outlook for 2026 remains uncertain due to concerns around conflict-induced inflation.
Note: The Fed’s ‘hold’ was seen as certain, even before the conflict in the Middle East.
When is the Fed meeting?
This evening at 18:00 pm GMT. Powell’s press conference will be at 18:30 pm GMT.
Note: Jerome Powell's four-year term as chair ends on May 15, with Kevin Warsh nominated to succeed him.
Fed Policy outlook:
Traders are pricing in just ONE rate cut in 2026.
Uncertainty revolving around the conflict in Iran and fears of inflation shocks may prompt Fed officials to strike a firmly hawkish stance.
Regarding the “dot plot”, it is expected to drift higher relative to December, consistent with the upward inflation revisions. This means policymakers are forecasting HIGHER interest rates in the future.
This could result in the Fed signalling ZERO rate cuts this year as oil prices surge.
Such an event may provide the dollar a massive boost.
Here is how these assets are forecasted to react in a 6-hour period after the Fed decision.
Source: Bloomberg.
USDInd: ↑ 0.4 % or ↓ 0.3%
NAS100: ↑ 1.3 % or ↓ 0.8%
US500: ↑ 1.1 % or ↓ 0.5%
XAUUSD: ↑ 2.0 % or ↓ 1.2%
XAGUSD: ↑ 3.1 % or ↓ 1.4%
BITCOIN: ↑ 1.6 % or ↓ 1.2%