The federal reserve established an unchanged interest rate among the American fears of Trump's recession and tariff fears

It is expected that the federal reserve will leave the policy rate unchanged to the second in a row.
A changed summary of economic forecasts can give key guidelines regarding the perspective of a policy.
The American dollar can recover if the Fed leaves the concerns about growth.

The United States Federal Reserve (FED) will announce monetary policy decisions and publish a changed summary of economic forecasts (SEP), the so -called Dot plot, after a March policy meeting on Wednesday. Market participants generally predict that the American Central Bank will leave the policy settings unchanged to the second in a row, after lowering the interest rate by 25 base points (BPS) to 4.25% -4.5% in December.

The CME Fedwatch tool shows that investors practically see no chance to reduce the rate in March, and a valuation of about 30% of the probability of reduction by 25 BPS in May. Therefore, the changed forecasts and comments of the Fed Chairman Jerome Powell could lead to the valuation of the American dollar (USD), and not by the decision of the interest rate.

In December, the Dot chart showed that decision -makers forecasted a total of 50 BPS reduction of the policy rate in 2025, while forecasting the annual growth of the gross domestic product (GDP) by 2.1% and noting the annual inflation of personal expenses for consumption (PCE) by 2.5% at the end.

“It is expected that FOMC will maintain a police position unchanged to the second in a row,” said TD Securities analysts presenting the FED event. “Based on the still constant signal provided by the labor market among the still sticky inflation, we expect that the chairman of Powell will summarize his message of patience on political decisions. We also do not anticipate significant changes in SEP or for now QT plans,” they added.

Economic indicator

FOMC economic projections

On four out of eight planned annual meetings, Federal reserve (Fed) releases a report describing its inflation forecasts, unemployment rate and economic growth over the next two years, and, more importantly, the division of individual interest rate forecasts of each federal open market (FOMC) Committee.

When the Fed announces the decision on the interest rate and how can it affect EUR/USD?

The US Federal Reserve is to announce its interest rate decision and publish a monetary policy statement with changed SEP on Wednesday at 18:00 GMT. Then the Fed Fed Jerome Powell press conference begins at 18:30 GMT.

Disappointing released macroeconomic data from the US in combination with the tariff ads of the US President Donald Trump revived the fears of the American economy, which fell into a recession. According to the PKBnow model, it is expected that the American economy is expected to conclude a contract at the first quarter in the first quarter.

In the event that the dot chart shows a speed reduction forecast for 75 BPS in 2025, this can be seen as a talkial change in the stake perspective and launch another USD sale leg. On the other hand, the Jastrzębie version in SEP, with officials forecasting a single excision of 25 BPS, can escalate the currency.

If the interest rate forecast remains unchanged, investors will control inflation and growth forecasts. The down version of the expectations regarding growth can harm USD, while improving inflation forecasts, without noticeable change in GDP estimates, can support USD in the near future.

Powell comments can also affect USD results. If it reduces the concerns about the deterioration of the economic situation and puts more emphasis on uncertainty related to the inflation perspective, citing the Trump administration tariff, USD will probably surpass their rivals in the near future. On the contrary, if Powell recognizes the signs of the deteriorating growth perspective, USD will probably have difficulty finding demand.

Eren Sengezer, the main analyst of the European session in FXStreet, provides low -term technical perspectives for EUR/USD:

“EUR/USD remains technically stubborn in the near future, because it remains in the upper half of the two -month growing regression channel. In addition, the indicator of the relative force indicator (RSI) on the daily table has nearly 70, which confirms the stubborn attitude.”

“From above, 1.1000 (upper limit of the ascending channel, round level) levels as a level of key resistance before 1,1100 (stationary level, round level) and 1.1180 (stationary level from October 2024). Looking south, the first level of support can be seen at 1.0770 (middle point of the erected channel) before 1,0720, where 200-day average motoring (SMA) is noticed.