Institutions: The Federal Reserve still has room to cut interest rates in the second half of the year; the recent rebound in the US dollar may be short-lived.

Lee Hardman of MUFG Bank noted in a report that the recent rebound in the US dollar may be short-lived, as the US-Iran conflict is expected to last only a few weeks, not months. He stated, "If this prediction is correct, the dollar's performance is likely to peak in the short term and reverse starting in the second quarter." Hardman believes that the conflict has pushed up oil prices and boosted the dollar due to US energy independence and decreased expectations of further Fed rate cuts. However, he pointed out that as long as energy prices fall, the Fed still has room to cut rates in the second half of 2026. Furthermore, policy uncertainty in the US is likely to remain high. (Jinshi)