US Dollar Outlook: Federal Reserve will Resist Rate Cuts
While Danske Bank agrees with the market assessment of the June Federal Reserve policy decision with rates on hold, it does not consider that later-year pricing is correct. The bank considers that the Fed will need to be more hawkish to maintain downward pressure on inflation.
Danske also considers that the US economy will relatively resilient, especially in global terms.
It adds; “In line with market expectations, we think the Fed has delivered its last rate hike for this hiking cycle. However, we think the current 65bp of rate cuts priced for the rest of the year is too aggressive.”
It expects that the hawkish Fed stance will underpin the dollar.
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