Dollar Slide Could Be Just Enough To Hit 2% Inflation Target

With a US Federal Reserve rate hike largely expected to be the result at Wednesday’s FOMC meeting – a 94.4% probability, according to CMEGroup’s FedWatch tool -- the watchword to determine future rate hikes might be “inflation.” But there is another performance driver that could be driving inflation to watch, and that is the US dollar. A continued drop in the dollar could increase inflation rather rapidly, particularly in the commodity sector. This, in turn, could force the Fed’s hand at raising rates quicker – a move the stock market might not like.