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2026-04-07 21:00:48
[Societe Generale: If the Fed Holds Rates Steady for the Year, the Dollar Will Fluctuate Within a Range; Rate Cuts Are the Trigger for a Decline] ⑴ Societe Generale analysts point out that if the Federal Reserve keeps interest rates unchanged for the remainder of the year as expected, the dollar may fluctuate within a range, as the market expects all G10 central banks except the Fed to raise rates. ⑵ Although only Sweden's projected growth rate this year exceeds that of the US among G10 economies, these interest rate expectations limit the dollar's appreciation. However, if the Fed significantly cuts rates against the backdrop of high inflation and loose fiscal policy, the dollar is likely to fall. ⑶ From a psychological perspective, the market currently prices only a 3% probability of a Fed rate hike in June, but Societe Generale's logic suggests that the key catalyst for a weaker dollar is not "the Fed holding rates steady" but "the Fed cutting rates." Against the backdrop of inflation driven up by the Iran war, any hint of a shift towards easing will trigger a concentrated liquidation of dollar long positions.
