After last week's inflation (CPI) and GDP data series provided a picture of the US economy still being strong, the focus of global financial markets has now shifted entirely to the FOMC Meeting scheduled for this week.
This is the toughest test for the USD and gold prices to determine the direction of monetary policy for the second quarter of 2026.
Investors are currently assessing whether the Federal Reserve (Fed) will begin to ease policy or remain with a "higher for longer" stance following the still uncertain global inflationary pressures.
THURSDAY (March 19, 2026)
Interest Rate Decision & FOMC Statement (2.00 AM) – This is the most important economic data throughout the week. The market expects the Fed to maintain interest rates at 3.50% - 3.75%.
However, the real focus is on the Summary of Economic Projections (SEP) or “Dot Plot”.
If the Dot Plot shows Fed members reducing their expectations for a rate cut in 2026, the USD will surge. Gold risks falling below psychological support levels.
If the Fed signals that inflation is still on a downward path and maintains an aggressive rate cut schedule, the USD will be sold off in a big way, while gold has the potential to break new record highs.
Fed Chairman Jerome Powell’s Press Conference (2.30 AM) – Powell’s rhetoric will be closely watched. Any hawkish tone will further strengthen the USD in the New York session.
Weekly Jobless Claims & Philly Fed Manufacturing Index (8.30 PM) – This data will be a gauge of how well the US employment and manufacturing sectors are holding up amid high interest rates. The current forecast for jobless claims is around 215,000.
If jobless claims come in lower than forecast (below 210,000), it proves that the labor market is still ‘hot’. This provides a strong reason for the Fed to be in no rush to cut interest rates, thus providing additional support to the USD strength.
On the other hand, a figure above 235,000 will trigger fears of an early recession.
FRIDAY (March 20, 2026)
Retail Sales Data (8.30 PM) – The close of this week will be determined by the strength of American consumer wallets. The market is predicting a modest increase of 0.3%.
Since consumer spending accounts for two-thirds of the US economy, stronger-than-expected data will confirm the “No Landing” narrative.
This will push the USD index (DXY) to close this week with green momentum.
If retail sales unexpectedly decline, gold will be in demand as a safe haven asset as investors worry that the US economy is starting to lose its purchasing power due to inflation and high borrowing costs.
Everything depends on the Fed’s “Dot Plot”. If the Fed surprises the market with a tighter tone, be prepared to see a sharp drop in the price of gold and other major currency pairs against the USD.
