Fed Raises Rates but DBS Says Dollar Strength Won't Last

Despite the Federal Reserve raising interest rates for the first time in over three years, DBS has forecast that dollar strength is unlikely to endure. In 2022, the U.S. led major economies in aggressively hiking rates, driving dollar strength. However, this time around, with major countries like Europe also adopting tightening measures, the impact of U.S. rate hikes may be limited. The Fed raised its benchmark rate by 0.25 percentage points to a range of 3.75%-4.00% on March 16 (local time), marking its first increase since 2023.