The Federal Reserve is not rushing decisions. But the window for rate cuts in 2026 remains open.
The minutes of the March FOMC meeting showed disagreements within the regulator.
Some participants allow for policy easing if inflation begins to steadily decline, while others warn that if price pressures persist, the opposite scenario is possible.
The Rate Was Left Unchanged
The March 17–18 meeting ended with an almost unanimous decision. The rate remained in the 3.5–3.75% range, with only one participant voting against. This outcome reflects the Fed’s current position.
The regulator is not ready to move sharply and prefers to keep room for maneuver. Especially against the backdrop of increasing geopolitical uncertainty.
The Conflict Adds Uncertainty
Special attention in the minutes is given to the situation in the Middle East. The military conflict is seen as a factor that could affect inflation, economic growth, and financial conditions.
At the same time, there is no single view within the Fed on the consequences. Meeting participants directly indicated that it is still too early to assess the scale of the conflict’s impact on the U.S. economy. This makes forecasts more cautious. The regulator is forced to consider several scenarios at once.
Rate Cuts Remain in the Baseline Scenario
Despite caution, some Fed representatives believe that over time the rate may be lowered. The condition remains the same— inflation must move toward target levels.
This is important for markets. The very fact that cuts are being discussed means that the tightening cycle is no longer seen as the main scenario. At the same time, it is not about a quick decision. The Fed makes it clear it will act only with confirmation of the inflation trend.
But Rate Hikes Are Also Not Ruled Out
Positions within the committee remain divergent. Some participants believe that in a situation of persistently high inflation, a rate hike may be required.
This creates the so-called two-sided scenario. The regulator reserves the right to move toward either easing or tightening. For the market, this means one thing: there is no clear direction yet.
The Labor Market Raises Additional Questions
In addition to inflation, the Fed is paying attention to the labor market. The minutes note that the current pace of job creation remains subdued, and the system itself may be vulnerable to external shocks.
This increases the regulator’s caution. A weak labor market combined with geopolitical risks makes the economic picture less stable and adds arguments in favor of a more flexible policy.
The Market Is Not Expecting Sharp Changes Yet
Investor expectations remain conservative. The probability of keeping the rate at the current level by the end of the year is seen as the baseline scenario.
Chances for a cut exist but do not dominate. The possibility of a hike is considered unlikely but not completely ruled out. This reflects the same uncertainty seen in the Fed minutes.
Why This Matters for the Crypto Market
Monetary policy remains one of the key factors for risk assets. Easing conditions usually supports demand for more volatile instruments, including bitcoin.
But the current situation is more complicated. The market is simultaneously taking into account geopolitics, inflation, and the state of the economy.
This makes the reaction less straightforward. Even a potential rate cut no longer guarantees automatic growth.
What’s Next?
The next Fed meeting will take place at the end of April. It may provide more clarity on risk assessment and the future policy trajectory. For now, the regulator is taking a wait-and-see approach. The rate cut scenario remains in play, but it is not the only one.
The main factor is inflation. If it begins to decline steadily, the Fed will have room to ease. If not, the market may face a tougher course than currently expected. This balance will determine market dynamics in the second half of the year.
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