Strategists: A few Federal Reserve (FED) officials may lower their expectations for interest rate cuts this year, which could be enough to turn the situation around.

On June 18, Matthew Ryan, head of market strategy at financial services firm Ebury, said that the Fed’s two rate cuts in 2025 will still be the base case for most policymakers, and given the severe uncertainty over tariffs, they may not be confident enough to materially change their views. However, there is a risk that a small number of officials believe that this year’s rate cuts will be lower than previously expected, which may be enough to turn the tide and favor a rate cut of only 25 basis points in 2025. The hawkish dot plot and Powell’s comments highlighting the lack of urgency to lower interest rates could provide some room for USD strength in the second half of the week.