Report: The Federal Reserve Faces Political Pressure, Dollar May Experience High Volatility in 2026

According to Jinshi News, Jane Foley, the head of foreign exchange strategy at Rabobank, stated in a report that as political pressure on the Federal Reserve increases, the dollar is expected to face greater volatility this year. The market is concerned that the Federal Reserve may lose its independence due to government demands for interest rate cuts and pressure on current Chairman Powell.

Foley pointed out that against the backdrop of persistently high inflation, other members of the FOMC may act as a counterbalance to a Fed chairman leaning towards rate cuts. The uncertainty surrounding the Federal Reserve's future credibility could exert downward pressure on the dollar, but it is unlikely to trigger a runaway decline.