Analyst Matthew Weller says the core of the first Fed meeting under FOMC chair
Kevin Walsh will likely be the SEP, dot plot and press conference rather than
the near-term rate decision, and these could materially reshape market
expectations for the policy path. Traders and economists broadly expect the Fed
to hold the target range at 3.50–3.75%. Walsh's remarks on central-bank
independence and communication strategy at the press conference are expected to
have lasting market impact. DXY 99.50 is viewed as the key watershed for this
week and beyond: if the Fed leaves the door open to a later-year hike and Walsh
stresses FOMC independence, the dollar could rebound toward ~100.50 (a one-year
high); if the SEP is more cautious and Walsh is ambiguous on independence, the
dollar would come under pressure and a break below 99.50 would likely pull the
50-day moving average toward 99.00.
