The question dominating market discussions is when the US Federal Reserve will resume cutting interest rates. While the central bank kept rates unchanged at 3.50%–3.75% in its latest decision, attention has now shifted to the timing of the next potential move.

Fed Chair Jerome Powell is expected to offer some guidance during his public comments scheduled for 2:30 p.m. today, which could provide clues on the policy outlook for the coming months.

According to economist Williamson, the likelihood of a rate cut at the next policy meeting on March 18 will largely depend on how the US labour market evolves over the next few weeks. He noted that while the unemployment rate has recently shown signs of stabilisation, there is growing divergence within the Federal Open Market Committee over how quickly interest rates should move back toward a neutral level.

“With the unemployment rate showing recent signs of stabilisation—and with widening divisions within the committee over how quickly to move rates back toward neutral—the Fed likely didn’t have a strong case for a fourth straight cut,” Williamson said.

However, he added that a March rate cut cannot be ruled out entirely. “A March cut remains a possibility, especially if labour market conditions soften meaningfully over the remainder of the first quarter,” he said, highlighting the Fed’s continued data-dependent approach.

For now, the Federal Reserve has reiterated that future decisions will be guided by incoming economic data, the evolving outlook, and the balance of risks, keeping markets closely focused on upcoming inflation and employment readings.