Institutions: The Federal Reserve Still Has Room to Cut Interest Rates in the Second Half of the Year, the Recent Dollar Rally May Be Short-Lived

According to Lee Hardman from Mitsubishi UFJ Financial Group in a report, the recent rebound of the US dollar may be short-lived, as the US-Iran conflict is expected to last only weeks, not months. He stated: "If this prediction is correct, the dollar's trend is likely to peak in the short term and reverse starting from the second quarter." Hardman believes that due to US energy independence and reduced expectations for further Federal Reserve rate cuts, the conflict has pushed up oil prices and boosted the dollar. However, he noted that as long as energy prices retreat, the Fed still has room to cut interest rates in the second half of 2026. Additionally, US policy uncertainty may remain elevated. (Jin10)