Mitsubishi UFJ: Fed's Decision May Fail to Boost the Dollar

September 16 - Lee Hardman, an analyst at Mitsubishi UFJ, said in a report that the US dollar may struggle to strengthen unless the Federal Reserve solidifies market expectations in its later decision that the rate hike cycle will persist for a longer period.

LSEG data shows that the market has almost fully priced in a 25 basis point rate hike on Wednesday and a cumulative rate hike of nearly 95 basis points by September 2027.

Hardman stated that this pricing sets a high threshold for the Federal Reserve to signal a more "hawkish" rate hike than expected. He pointed out that the Federal Reserve's communication is unlikely to clearly convey how much further tightening is needed in the future.