US Dollar Surges to Over 1-Year High at 101.02 Amid Fed Rate Hike Expectations

US3.72%
USIDX0.23%
The US dollar index (DXY) rose 0.2% to 101.02 on Monday (June 22), hitting its highest level since May mid-2025, as market expectations for a more hawkish Federal Reserve stance intensified. According to the Fed's latest Economic Projections Summary released last week, at least half of Federal Open Market Committee (FOMC) members now expect at least one rate increase this year to combat inflation pressures, a significant shift from prior expectations. Market pricing has reversed sharply: 2026 now shows expectations for at least one 0.25 percentage point rate hike, versus prior expectations of at least two 0.25 percentage point rate cuts. US Bank said it no longer expects Fed rate cuts before 2028.
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