#FedRateCutAffectsDollarTrend The federal Reserve has maintained the federal funds rate at 4.25% to 4.50% since January meeting, following three consecutive rate cuts totaling 1.0% in late 2024. The fed has signaled a more gradual approach to future rate reductions, projecting only two cuts in 2025 down from the four anticipated earlier. Market participants are adjusting their expectations accordingly. Interest rates future indicates just over a 50% probability of a rate cut by mid 2025 reflecting uncertainty about the timing of the next reduction. Economics are now divided, with some predicting rate cut in the second quarter and other expecting no cuts this year. The U.S dollar has reminded relatively strong amid these developments. In January, robust U.S employment data led to the rollout reaching multi year highs, as the strong economic performance tempered expectations from imminent rate cuts. However, recent geopolitical events, such as uncertainties surrounding the Ukraine peace deals, have introduced volatility. These uncertainties have contributed to a slight weakening of the dollar leading to increasing gold price. Looking ahead, the Federal Open Market Committee (FOMC) is not expected to change interests rate at its coming meeting on March 19. The Fed’s cautious stance is influenced by various factors, including potential inflationary pressures from on going trade policies and tariffs. Kansas City Fed President Jeffrey Schmid has warned against premature rate cuts in response to potential economic weakenesses, emphasizing the need to fully address inflation risks before adjusting monetary policy.