Dollar Index Slips as Fed Cuts Rates

2025-12-10 19:10 By Joana Ferreira 1 min. read

The dollar index fell to 98.6, its lowest level since October 20, following the Federal Reserve’s anticipated 25-basis-point rate cut and its projection of one additional reduction in 2026.

Fed Chair Jerome Powell emphasized that the focus is on whether to stop cutting rates, lower them slightly, or reduce them “more than a little,” with no rate hikes under consideration.

A subtle change in the Fed’s statement, referencing “the extent and timing of additional adjustments,” suggests officials are likely to pause further cuts in January as they await more data to assess the economic outlook.

Meanwhile, the Fed’s latest projections show a notable upgrade to the growth outlook.

Policymakers now expect the economy to expand 2.3% next year, up from 1.8% in September, while 2027 growth is projected at 2%, slightly above the previous 1.9% forecast.

Inflation forecasts were trimmed to 2.5% for 2025 and 2.4% for 2026, though both remain above the 2% target.



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