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[Preview of the Fed's March Meeting Minutes: Oil Price Shock Pushes Up Inflation Expectations, Policymakers Face Dilemma Between Rate Hikes and Growth Protection] ⑴ At the March meeting, Fed officials were aware that the Iraq War would push up this year's inflation rate. At that time, the global oil crisis entered its third week, with benchmark oil prices rising from about $70 to $100 per barrel. Almost all policymakers included expectations of rising inflation in 2026 in their post-meeting forecasts. ⑵ Now, with the war in its second month and oil prices up by about 10%, previous hopes for a swift end to the conflict and a rapid drop in oil prices may be being replaced by other economic scenarios, typically mentioned in staff briefings on the economic outlook and likely detailed in the meeting minutes. ⑶ The Fed kept its policy rate unchanged in March, within the 3.5% to 3.75% range, offering little indication of a near-term rate adjustment. Investors currently expect the Fed's policy rate to remain unchanged until at least the end of 2027. ⑷ Even before the war broke out, some Fed officials were concerned that inflation was stagnating about one percentage point above the 2% target and indicated they were prepared to signal the possibility of a rate hike. (5) The meeting minutes may reveal whether internal sentiment is further tilting towards interest rate hikes as policymakers weigh whether the oil price shock poses a greater threat to the inflation target or to economic growth and employment, especially given consumers' concerns about rising gasoline prices and energy-driven costs, which could trigger spending changes and weaken overall economic momentum. (6) From a trading psychology perspective, market expectations for rate cuts have been continuously revised. If the meeting minutes show a stronger inclination towards rate hikes, it could further depress risk asset valuations. Whether the reassuring rebound brought about by the Middle East ceasefire can be sustained will depend on the degree to which subsequent inflation data matches the actual policy path of the Federal Reserve. (7) Future focus will be on the specific descriptions of the economic scenarios for staff in the meeting minutes, as well as the details of internal discussions among policymakers regarding the threshold for rate hikes. These will be key clues for judging the direction of the Federal Reserve's next move.