Preview: Fed's March Meeting Minutes to be Released Tonight Amid Market Focus on Interest Rate Outlook Amid US-Iran Conflict

On April 8, at 2 AM Beijing time on Thursday, the Federal Reserve will release the minutes from its March meeting. Notably, the March meeting was held against the backdrop of escalating geopolitical risks in the Middle East. These minutes will reveal how officials weighed these risks before the latest round of tensions, and how relevant their thoughts at that time remain today. Since the outbreak of the Iran conflict on February 28, borrowing costs have risen sharply, placing significant pressure on the market, which has effectively tightened the financial environment even without any policy action from the Fed. The market’s expectations for the direction of interest rates will also be a focal point. During the March meeting, the market still anticipated that the Fed would cut rates once later this year. While this view has not completely dissipated, it has become increasingly tenuous. Rising oil prices and a tighter financial environment make it harder for the Fed to find excuses for easing. The meeting may also have discussed factors that could compel officials to consider raising rates again, which will certainly pique investors’ interest.