Although the outcome of the latest Federal Reserve meeting made it clear that further rate cuts in the US could quickly flip into rate hikes, there are still voices within the Fed who believe otherwise.

Fed Governor Stephen Miran said in an interview yesterday that monetary policy should be formed cautiously and judiciously amid geopolitical tensions. Miran flatly rejected the idea that the policy-making process should be guided by short-term, often emotionally charged considerations related to the US-Iran conflict. He stressed that such events, important as they are, should not become the sole or even primary factor determining the economy's trajectory and, consequently, Fed decisions.

"We should wait until we have all the information before really changing our outlook," Miran said, emphasising the importance of obtaining the full picture. His remark reflects a fundamental principle of macroeconomic analysis: blind decision-making under pressure from immediate events risks strategic mistakes. The Fed, as an institution tasked with ensuring long-term financial stability, cannot afford to react impulsively. A deep analysis of all internal and external factors that might influence economic indicators is required. Jerome Powell made similar points last week.

"And I think it's still too early to draw firm conclusions about how things will look in 12 months," Miran added. Those words underscore the inherent uncertainty in projecting long?term economic effects under rapidly changing geopolitical conditions. In Miran's view, military conflicts and trade wars introduce unpredictability into economic models. The central bank's task is not to forecast the future with absolute precision but to create conditions for an economy that is resilient and able to adapt to different scenarios.

Nevertheless, Miran said he still expects four rate cuts this year. Last week, the Fed left the policy rate unchanged for a second consecutive meeting, citing heightened economic uncertainty from the war, and Chair Jerome Powell stressed the need for further progress in bringing down inflation. Miran dissented from the decision and would have preferred a 25-bp cut.

Technical outlook for EUR/USD

Buyers now need to reclaim 1.1615. Only that will allow a test of 1.1638. From there, the currency pair could rise to 1.1669, but doing so without support from major players will be difficult. The more distant upside target is 1.1705. On the downside, I expect significant buyer interest only around 1.1588. If there is no buying there, it would be prudent to wait for a new low at 1.1554 or open long positions from 1.1526.

Technical outlook for GBP/USD

Pound buyers should conquer the nearest resistance at 1.3435. Only that would allow targeting 1.3475, above which a further breakout will be difficult. The more distant upside target is around 1.3515. On the downside, bears will try to seize control at 1.3405. If they succeed, a break of that range would hit bullish positions hard and could push GBP/USD down to 1.3376 with potential to extend to 1.3350.