US Dollar Index Hits New High Amid Expectations of Further Rate Hikes

The US dollar index rose to its highest level since late July on Wednesday, September 23, as markets anticipate further Federal Reserve rate hikes this year.

According to the CME FedWatch tool, the probability of at least one more interest rate hike is close to 90%.

Fed officials, including Mester and Goolsbee, have emphasized the need for further rate hikes due to upside inflation risks stemming from demand and supply shocks.

Chicago Fed President Evans warned that if demand is judged to be overheating, policy could shift to a 'more aggressive and increasingly front-loaded' stance.