4 min readThe Federal Reserve left interest rates unchanged in the second meeting of 2026. The vote was 11-1 to leave rates at 3.5% to 3.75%. Governor Stephen Miran voted for a 25bps cut.
Given that the decision was fully priced in, the focus was on the Federal Reserve’s updated projections. The Fed upwardly revised its growth forecast to 2.4% in 2026, up from 2.3% in December. Unemployment is expected to remain at 4.4%, and inflation was upwardly revised to 2.7% in 2026, from 2.4%.
Interestingly, the Fed’s dot plot still points to a rate cut this year, even as growth and inflation forecasts are revised higher. Federal Reserve Chair Jerome Powell said that progress on inflation stemming from tariffs should be seen in the middle of the year. If it doesn’t, then a rate cut would be less likely. Powell also noted that it’s too soon to know the scope and duration of the Iran war’s potential effects on the US economy.
U.S. Treasury yields are rising, the S&P 500 has fallen to session lows, and the USD is rising. Oil prices have also risen to $108 per barrel, further complicating the picture.
DOLLAR INDEX (DXY):
The US Dollar Index was trading higher ahead of the FOMC rate decision, and has extended those gains following the announcement, to rise above 100.00. On the 4-hour chart the price rebounded higher from the 50 SMA. Buyers will look towards 100.54 to create a higher high.
EURO vs DOLLAR (EUR/USD):
If we take a closer look at the technicals, we can observe how the EUR/USD price was trading around 1.1515 before the decision, and post the decision, the EUR/USD fell to 1.1478, breaking below the 20 SMA. The downtrend remains in tact.
S&P 500 (SDX):
The S&P 500 has also seen an impact from the decision and Fed Powell’s early comments. The price was already trading lower on the day at 6676 ahead of the decision. The price has falen further following the decision to 6645 a session low. The price trades below its 200 and 50 SMA. Sellers could look to extend losses towards 6600.
Trading involves risk.
Author
Risk DisclaimerThe content provided here is for informational purposes only. It is not intended as personal investment advice and does not constitute a solicitation or invitation to engage in any financial transactions, investments, or related activities. Past performance is not a reliable indicator of future results.
The financial products offered by the Company are complex and come with a high risk of losing money rapidly due to leverage. These products may not be suitable for all investors. Before engaging, you should consider whether you understand how these leveraged products work and whether you can afford the high risk of losing your money.
The Company does not accept clients from the Restricted Jurisdictions as indicated in our website/ T&C. Some services or products may not be available in your jurisdiction.
The applicable legal entity and its respective products and services depend on the client’s country of residence and the entity with which the client has established a contractual relationship during registration.
