The USD/NOK currency pair hovered above a 28 1/2-month low of 9.8587 on Tuesday ahead of the outcome of the Federal Reserve’s and Norges Bank’s policy meetings.

The Fed is widely expected to leave its federal funds rate target range intact at 4.25%-4.50% at its June 17th-18th meeting.

The US central bank has adopted a wait-and-see approach amid concerns that the Trump administration’s tariffs could push inflation higher and slow GDP growth.

The minutes of the FOMC’s May meeting showed that Fed policy makers viewed the announced tariff increases as being significantly larger and more extensive than anticipated. What is more, policy makers warned of a substantial uncertainty surrounding the direction of trade policy as well as the scope, timing and duration of its effects on economy.

Fed officials considered this uncertainty as unusually high and cautioned that downside risks to employment and economic activity and upside risks to inflation had risen.

The new set of FOMC economic forecasts may offer further evidence of how policy makers perceive the impact of the Trump administration’s tariff policies.

Investors will also be paying close attention to the press conference with Fed Chair Jerome Powell for clues over the timing of any future interest rate cuts.

Meanwhile, Norges Bank is expected to keep its key policy rate on hold at 4.5% for the 12th straight meeting on June 19th.

The central bank had cautioned that while inflation eased from the elevated levels from 2023, it still remained above target. Any premature interest rate cuts could lead to inflation resurgence amid the uncertain economic backdrop, Norges Bank also warned.

The USD/NOK currency pair was last up 0.24% on the day to trade at 9.9036.