Dollar Could Fall if Fed Holds Rates Steady

Dow Jones07-28 21:59

1359 GMT - The dollar could suffer knee-jerk weakness if the Federal Reserve leaves interest rates steady on Wednesday, TD Securities strategists say in a note. Market pricing on LSEG shows a 34% possibility that the Fed could raise rates Wednesday and are fully pricing a move by September. The TD analysts expect unchanged rates with Beth Hammack and Lorie Logan dissenting in favor or raising rates. Still, any short-term dollar weakness will likely be limited as Fed rate-hike pricing for the rest of the 2026 remains intact, they say. TD sees Fed Chair Kevin Warsh providing little forward guidance, reiterating a commitment to price stability. Warsh could note the fall in recent inflation data while suggesting inflation remains elevated, they say.

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