The dollar index held steady near 98.3 on Thursday, showing resilience after recent gains. Investors are keenly anticipating guidance from the Federal Reserve’s Jackson Hole symposium, particularly Fed Chair Jerome Powell’s speech, for insights into future interest rate decisions. Market expectations for a September rate cut have slightly decreased, while internal divisions within the Fed regarding inflation versus labor market risks, compounded by tariff concerns, add to the uncertainty. Political pressure from President Trump for lower rates and potential changes in Fed leadership further complicate the outlook.
- The dollar index hovered near 98.3.
- Markets await the Federal Reserve’s Jackson Hole symposium for direction on interest rates.
- Futures price an 82% chance of a quarter-point rate cut in September, down from 94% a week earlier.
- Fed officials remain more concerned about inflation than labor market risks.
- Tariffs further divide the Fed committee.
- President Trump called for Fed Governor Lisa Cook’s resignation and reiterated his push for lower rates.
- Trump is weighing possible successors to Powell, whose term expires in May.
- Treasury Secretary Scott Bessent publicly backed a larger half-point cut by September.
The current environment suggests a period of watchful waiting for the US dollar. While the index has demonstrated some stability, its future trajectory is heavily dependent on the signals emanating from the Federal Reserve. Competing pressures, stemming from concerns about inflation, political influence, and the potential for leadership changes, introduce significant ambiguity. The interplay of these factors will likely dictate the dollar’s performance in the near term.