Minutes from the Federal Reserve’s Meeting to be Released

• Minutes from the June 17-18 Federal Reserve meeting are set to be made public on Wednesday.
• Investors will closely analyze the discussions around the decision to maintain current policy settings.
• The market suggests there’s a slim chance of a 25 basis points rate cut in July.

Minutes detailing the US Federal Reserve’s Monetary Policy Conference from June 17-18 will be available on Wednesday at 6:00 PM GMT. While officials opted to keep the policy rate between 4.25% and 4.5%, the updated Summary of Economic Projections (SEP) indicates plans for two rate cuts of 25 basis points in 2025.

Federal Reserve Maintains Current Policy Settings

The Federal Open Market Committee (FOMC) decided to hold interest rates steady during its June session. In its statement, the US Central Bank noted that inflation was “somewhat elevated,” yet highlighted a robust labor market with low unemployment rates.

The SEP indicated that officials still anticipate a total of 50 basis points in rate reduction for 2025, though projections for 2026 now suggest only a 25 basis points cut instead of the previously expected 50. At a press briefing following the meeting, Fed Chair Jerome Powell emphasized there’s no immediate need to adjust policies.

Some Fed officials expressed openness to a potential rate decrease in July. However, a strong June employment report pointed towards the probability of a policy shift being postponed until September. The unemployment rate dipped from 4.2% in May to 4.1%, and non-farm payrolls increased by 147,000, which exceeded forecasts of 110,000.

Release Timing and Potential Impact on the US Dollar

The FOMC will publish the minutes from its June meeting on Wednesday at 18:00 GMT. Investors will pay close attention to the discussions about policy direction.

The CME FedWatch tool indicates that the market currently sees minimal chances for a rate cut this July, while the likelihood of holding rates steady in September is about 36%. Should the minutes reveal that officials are hesitant to delay easing measures until September, the US dollar could face heightened selling pressure in response.

On another front, the US might maintain strength against competitors if the documents imply that rate cuts could be postponed, particularly in light of President Trump’s tariff decisions being associated with inflationary pressures.

Late Monday, the White House announced Trump signed an executive order aiming for a deadline of August 1 for tariff implementation. A letter to trade partners indicated a potential 25% tariff on Japan and South Korea: “If we choose to raise tariffs for any reason, that will simply be added to the existing 25% we charge,” Trump stated in the letter, expressing his usual forthrightness.

Eren Sengezer, a European Session Lead Analyst at FXSTREET, offered insights into the USD’s trajectory.

“Though it has been on a steady recovery since early July, the daily chart’s relative strength index (RSI) is still below 50. The USD index hasn’t managed to consistently close even at the 20-day simple moving average (SMA), indicating it may still need some push to attract buyers.”

“On a different note, resolutions show key levels at 97.80 (Fibonacci 23.6% support, 20-day SMA), and higher up at 98.50 (Fibonacci 38.2% retracement), along with 99.00-99.10 (50-day SMA). Lower levels can be found at 96.80 (midpoint of the upward channel), 96.30 (lower trendline), and 95.80 (lower channel).”