Central bank hawkish holds and USD outlook (with Tom, Jumana)

Jane Foley expects central banks to talk tough but hope they don't have to hike as much as markets price. ECB on cusp of hiking, BoJ almost certain to hike, BoE may talk tough instead. USD benefits medium-term from US growth resilience and tech flows, despite short-term rate dynamics.

Yields cautious up , short term, interviewee implicit

implicit

NDX

RUT

Oil

Metals

USD up , medium term, interviewee explicit

explicit

Rabobank 7.0
Commercial Bank $683.00B
Jane Foley 7.5

Central bank hawkish holds and USD outlook (with Tom, Jumana)

dxy

USD benefits medium-term from US growth resilience. Asset allocation swinging in favor of US tech focus promotes dollar.

3/30/2026 3:16:28 PM	short term up	6 days later	+0.02%	+0.02%
3/30/2026 2:09:27 PM	short term up	6 days later	+0.02%	+0.02%
2/2/2026 1:29:34 PM	short term cautious up	6 days later	-0.64%	-0.32%
11/3/2025 6:55:23 PM	medium term cautious up	20 days later	-0.08%	-0.04%
10/22/2025 7:43:18 PM	short term up	5 days later	-0.25%	-0.25%
7/31/2025 2:28:48 PM	short term up	5 days later	-0.52%	-0.52%

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yields

Central banks expected to talk tough with hawkish holds. ECB on cusp of hiking, BoJ almost certain to hike. Market has done tightening already but inflation pressures persist.

5/11/2026 2:21:17 PM	short term up	6 days later	+3.59%	+3.59%
8/19/2025 1:48:18 AM	medium term cautious down	20 days later	-5.17%	+2.58%

Asks whether central banks will hike significantly to offset second-round inflation effects or wait and see, given inflation moving higher but growth challenged.

Tom
Jane Foley

Central banks will talk tough but hope they don't have to hike as much as markets expect. ECB on cusp of hiking, BoJ almost a done deal, BoE may talk tough as better option. RBNZ hawkish hold despite weak economy sets template.

Market has done a lot of tightening already. Futures market for oil optimistic but physical market shows stress (diesel, kerosene in Asia). All G10 central banks meet by end of June, only weeks to decide. By July/August there may be more favorable news on conflict.
Asks if relative slowdown in growth elsewhere benefits USD, noting US doing okay while Europe PMIs disappoint.

Jumana
Jane Foley

USD benefits medium-term from US growth resilience. Short-term FX works on short-term rates - market got excited about rate hikes elsewhere in March, but FOMC minutes and CPI/PPI shifted focus to Fed potentially more hawkish, giving delayed dollar strength.

US economy less affected on growth perspective. Negative attitudes about structural USD decline are dampened by asset allocation swinging back to US tech focus, while Europe faces energy crisis dampening growth.
Asks about correlation between US equity performance (AI/semis leading rally) and USD, whether flows benefit dollar.

Tom
Jane Foley

Asset allocation swinging in favor of US tech focus promotes dollar. Europe's energy crisis dampens growth expectations that were optimistic on German fiscal spending. This dampens negative attitudes about USD structural decline.

Don't have 1.20 in euro-dollar forecast table. Even if Strait reopens, Europe as open economy and oil importer will be far more exposed to inflationary pressures than US.

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