Dollar Likely to Gain if Fed Removes Forecast for Rate Cut in 2026 -- Market Talk

Dow Jones
Mar 18

1342 GMT - The dollar could gain if the Federal Reserve's 'dot plot' forecasts on Wednesday show an interest-rate cut in 2026 is no longer expected due to higher energy prices, ING's Francesco Pesole says in a note. The Fed's forecasts in December flagged one rate cut in 2026. "The dollar should benefit from a revision to no cuts in 2026," he says. "The risks are clearly of a hawkish revision." Still, the dollar's response will likely be short-lived as focus quickly returns to Middle East developments, Pesole says. U.S. money markets currently price in a rate reduction of 20.9 basis points this year, LSEG data show. The DXY dollar index rises 0.3% to 99.87. The Fed announces a decision at 1800 GMT. (jessica.fleetham@wsj.com)

 

(END) Dow Jones Newswires

March 18, 2026 09:44 ET (13:44 GMT)

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