Institutions: Fed Still Has Room for Rate Cuts in the Second Half of the Year, Recent Dollar Rally May Be Short-Lived

Odaily News Lee Hardman of MUFG Bank noted in a report that the recent rebound in the US dollar may be short-lived, as the US-Iran conflict is expected to last only weeks rather than months. He stated, "If this prediction holds true, the dollar's momentum is likely to peak in the near term and reverse starting from the second quarter." Hardman believes the conflict has pushed up oil prices and boosted the dollar due to US energy independence and reduced expectations for further Fed rate cuts. However, he pointed out that as long as energy prices retreat, the Fed still has room to cut rates in the second half of 2026. Additionally, US policy uncertainty may remain elevated. (Jin10)