The assumption that the Dollar must rally on a higher dot plot could be misguided if previous meetings are a guide. At each of the last three previous meetings when the Fed raised the 2024 median dot, the Dollar weakened against the Euro and Sterling. At two meetings, it dropped against the Yen too. 

Treasury yields retreated on four occasions on the 10Y, and twice on the 2Y. The biggest move was understandably the one in March when the meeting coincided with SVB. Could this time be different? It’s hard to see the Dollar losing ground at a time when stagflationary concerns are permeating through the Eurozone and the UK, and with lingering doubts over the outlook for China.