The US Dollar traded narrowly on Wednesday, remaining near multi-year lows as investors prepared for the Federal Reserve's monetary policy meeting. Though the Fed is expected to maintain interest rates, attention is focused on updated economic projections and Chair Powell's comments, which could suggest future rate trajectories. Despite disappointing retail sales data, strong consumer fundamentals and wage growth have mitigated immediate easing expectations. Market predictions foresee two rate cuts by the year's end, with US Treasury yields steady as geopolitical tensions complicate market sentiment.
Markets currently price in two rate cuts by year-end. US Treasury yields were little changed, with the 10-year note holding steady near 4.4%, as traders awaited clarity from the Fed.
Although May's retail sales data disappointed earlier this week, underlying consumer strength and elevated wage growth have helped temper expectations for immediate policy easing.
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