The US dollar index rose to a two-year high, and the market expected the Federal Reserve to cautiously cut interest rates in 2025
According to BlockBeats, on January 2, the U.S. dollar index rose to a two-year high as the market expected the Federal Reserve to take a more cautious approach to interest rate cuts in 2025. The market is betting that President-elect Trump's policies, including proposed trade tariffs and tax cuts, will increase inflation and limit interest rate cuts.Mohammad Saraf of Danske Bank said that because the U.S. economy is resilient, the market expects no more than two 25 basis point rate cuts throughout the year, which will support the dollar. In December last year, the Federal Reserve also hinted that it would slow the pace of rate cuts.