Market analysis: If the Federal Reserve expects to cut interest rates once this year, the US dollar may strengthen

According to a report by Golden Finance, the financial website Fxstreet analyzed that it is widely expected that the Federal Reserve will maintain its policy setting unchanged at its fourth consecutive meeting. At present, the probability of the Federal Reserve choosing to cut interest rates for the first time of the year in September is about 70%. Therefore, the revisions in the dot matrix and Powell's comments may provide key clues for the timing and frequency of interest rate cuts. If the revised economic forecast shows that policy makers still expect a total interest rate cut of 50 basis points this year, the US dollar may experience selling pressure again in an immediate response. The downward adjustment of GDP growth and/or inflation expectations may exacerbate the sell-off of the US dollar. On the contrary, if the dot matrix highlights officials' current expectation of only one interest rate cut this year, the US dollar may strengthen. Investors currently expect a probability of about 70% that the Federal Reserve will cut interest rates at least twice in 2025. This market positioning indicates that in the event of hawkish surprises, the US dollar will have strong bullish potential.