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BNY strategist John Velis anticipates the Federal Reserve will maintain interest rates at the April FOMC meeting, citing uncertainty over inflation trends and the evolving situation with Iran. The central bank is expected to provide minimal forward guidance, reflecting its cautious stance amid mixed economic signals. This decision would likely keep the USD in a consolidation phase, with market focus shifting to inflation data and geopolitical developments. For traders, the lack of clear policy direction may increase volatility in USD pairs and commodities like gold, as investors balance risk-on and risk-off positions. The mention of potential rate cuts by late 2026 introduces a long-term bearish outlook for the USD, though short-term stability is expected. Key indicators to monitor include upcoming CPI reports and Middle East tensions, which could force the Fed to adjust its stance.
