The Minutes of the United States (US) Federal Reserve’s (Fed) January 27-28 monetary policy meeting will be published on Wednesday at 19:00 GMT. The US central bank decided to leave the policy rate unchanged at the range of 3.50%-3.75%, but Fed Governors Stephen Miran and Christopher Waller voted to lower the fed funds rate by 25 bps.
Jerome Powell and company opted to pause rate cuts in January
The Federal Open Market Committee (FOMC) held the interest rate unchanged in January after opting for three consecutive 25 basis points (bps) rate cuts. In the policy statement, the Fed noted that the unemployment rate has shown some signs of stabilisation but reiterated that it will remain attentive to risks to both sides of the dual mandate.
In the post-meeting press conference, Fed Chairman Jerome Powell adopted a neutral tone, saying upside risks to inflation and downside risks to employment have both diminished. “I think it’s hard to look at incoming data and say the policy is significantly restrictive and may be loosely neutral, or somewhat restrictive,” he added.
Previewing the Fed’s publication, BBH analysts said, “the minutes should underscore that the Fed is in no rush to resume easing.”
“Look for additional color on why the FOMC dialed back concerns over downside risks to employment. Recall, at that meeting the FOMC voted 10-2 to keep the target range for the Fed funds rate unchanged at 3.50-3.75%. Fed Governors Stephen Miran and Christopher Waller voted for a 25bps cut,” they added.
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
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Next release:
Wed Feb 18, 2026 19:00
Frequency:
Irregular
Consensus:
–
Previous:
–
Source:
Federal Reserve
When will FOMC Minutes be released and how could it affect the US Dollar?
The FOMC will release the Minutes of the January 27-28 policy meeting at 19:00 GMT on Wednesday.
According to the CME FedWatch Tool, markets virtually see no chance of a rate cut in March and price in about a 25% probability of a 25 bps reduction in April. This market positioning suggests that the US Dollar (USD) doesn’t have a lot of room on the upside, even if the publication reaffirms that policymakers are likely to prefer another policy hold next month.
Nevertheless, the USD could gather strength against its rivals if the document shows that officials could refrain from easing the policy in case the labor market shows signs of improving. The US Bureau of Labor Statistics announced last week that Nonfarm Payrolls (NFP) rose by 130K in January, compared to the market expectation for an increase of 70K, and the Unemployment Rate edged lower to 4.3% from 4.4% in December.
Conversely, the USD could come under bearish pressure if the publication highlights growing confidence in further easing in price pressures among policymakers. In this scenario, markets could reassess the probability of a rate cut in April, given the fact that the latest data showed the Consumer Price Index (CPI) inflation softened to 2.4% in January from 2.7% in December.
TD Securities analysts said that the January FOMC Minutes will likely show the wide dispersion of views on the Committee about the future policy path. “While most view rates slightly above neutral, some participants likely saw a high bar for further easing this year. In line with dissents, a couple participants likely called for cuts at this meeting,” they added.
Eren Sengezer, European Session Lead Analyst at FXStreet, shares a brief outlook for the USD Index:
“The Relative Strength Index (RSI) indicator on the daily chart rose to the 50 region, reflecting a diminishing seller interest. Additionally, the USD Index climbed above the 20-day Simple Moving Average (SMA).”
On the upside, the 50-day SMA aligns as the first resistance level at 98.00 ahead of 98.45-98.60, where the 100-day and the 200-day SMAs converge. In case the USD Index clears that latter resistance area, it could face the next resistance at 99.00 (round level). Looking south, the first support level could be spotted at 96.50 (static level) ahead of 95.50 (static level).”
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Source: https://www.fxstreet.com/news/fed-minutes-to-shed-light-on-january-hold-decision-amid-hawkish-rate-outlook-202602181415
