Fed holds rates steady; Aussie slips after Q1 CPI and trimmed mean undershoot forecasts

The Federal Reserve held its policy rate steady at 3.5% to 3.75% on April 29, while markets also continued to digest Australia’s latest inflation data and the Australian dollar’s earlier slip.

Reuters reported that the Fed vote was the most divided since 1992. Before the decision, the dollar had been steady as investors waited for guidance from policymakers.

In Australia, the Bureau of Statistics said consumer prices rose 4.6% year on year in March 2026, while trimmed mean inflation was unchanged at 3.3% year on year. Reuters also reported that the quarterly trimmed mean rose 0.8%, slightly below a 0.9% forecast, which helped push the Australian dollar lower.

The official data also showed automotive fuel prices rose 32.8% in March, adding to headline inflation. Taken together, the figures leave the Reserve Bank of Australia facing sticky price pressure even after the core reading came in just below expectations.

For currency traders, the key question now is whether the Fed’s steady stance and the Australian inflation mix will shift expectations for the next move in both the dollar and the Aussie.