The dollar trades at a critical juncture amid rising political noise. President Trump has escalated criticism of the Fed, signaling potential replacement of Chair Powell and challenging current rate policies. Market expectations for a December rate cut collapsed from 95% to 46% across CME, Kalshi, and Polymarket. Fed officials remain divided: Governor Waller supports cuts due to weakening labor conditions, while Vice Chair Jefferson urges caution. Markets now anticipate the first rate reduction in March–April 2026. Recent political developments, including bipartisan release of Epstein files and Trump’s announcement of up to $1 trillion in Saudi investments, add further complexity.
