#Gate广场四月发帖挑战 Interest rate hikes and cuts, both on the table

In the early hours of April 9, the Federal Reserve released the minutes from its March monetary policy meeting, revealing clear disagreements among officials on whether the US-Iran conflict will impact the US labor market or push inflation higher.

Hawkish: Believes that rate hikes are necessary to combat inflation that remains persistently above the central bank’s 2% target.
Dovish: Concerned about employment prospects, believing that the next policy move will be a rate cut.

Looking back at the Fed’s March meeting, the dot plot showed a median expectation of one rate cut in 2026 and another in 2027. This outlook is consistent with December of last year, but the issue is that more members now support just one rate cut than last year, while fewer support multiple cuts.
Overall, among the 19 Fed officials, 7 believe there is no room for rate cuts in 2026, 7 think there will be one, and only 5 expect two or more.

The threshold for rate cuts is narrowing.
The market has also responded. Rate futures data show traders have significantly delayed the first rate cut window to December. After the minutes were released, the market-implied probability of another rate hike this year rose from less than 15% to about 30%. In fact, before the US-Iran conflict erupted, inflation was easing back toward the target, and the Fed was on a gradual rate-cutting path. But after the conflict broke out, gasoline prices surged, potentially disrupting this plan.
Currently, signs of economic slowdown are emerging in the US, with some Wall Street institutions, including Goldman Sachs, raising recession expectations. In Q4 2025, US GDP growth is only 0.7% quarter-over-quarter, and Q1 2026 is expected to grow just 1.3%, below the sustainable rate of 1.8%. Last week, after the US government reported 178k new non-farm jobs in March, concerns about the labor market eased somewhat. But just as a glimmer of peace appeared in the US-Iran conflict, Iran again closed the Strait of Hormuz last night at 8 pm. If Middle East tensions persist, energy prices could stay high, raising input costs and increasing the risks of inflation and employment decline in the US and globally.
Overall, this meeting’s minutes reveal a key shift: the Fed’s policy path is moving from “certain rate cuts” to “highly uncertain trajectory.” Geopolitical risks have become a core variable influencing policy direction. The Fed is caught between “fighting inflation” and “stabilizing employment.”
In the short term, it’s likely to remain cautious and watchful, with a clearer direction possibly emerging by mid-year.

What does this mean for investors?
The Fed’s rate cut window has been pushed back significantly, and maintaining high interest rates for longer has become the baseline. The tightening of global liquidity will continue to impact asset prices. In this environment of rising uncertainty, cash is king, and caution is paramount.
And most importantly—don’t rush to buy the dip. Wait until the Fed “sees clearly,” then we can act, and it won’t be too late.