Analyst: Fed Under Pressure, US Dollar May Face High Volatility in 2026

Odaily News According to a report by Jane Foley, Head of FX Strategy at Rabobank, the US dollar is expected to face greater volatility this year as pressure on the Federal Reserve mounts. The market is concerned that the Fed may lose its independence due to government demands for interest rate cuts and pressure on current Chairman Powell. However, Foley noted that there are also views suggesting that, in the context of still elevated inflation, other members of the FOMC could act as a counterbalance to a Fed chair inclined towards rate cuts. Foley stated that uncertainty surrounding the Fed's future credibility could exert downward pressure on the US dollar, "but not to the extent of triggering an uncontrolled decline." (Jin10)