Further rate hikes are likely to be off the table, but the Fed is unlikely to be satisfied with the extent of rate cuts that the market has priced in. After all, falling yields could reignite inflationary risks. Therefore, Chairman Jerome Powell will continue to emphasize the risks to inflation. The question is whether he will succeed.

Powell does not have an easy task. He has to convince the market that the Fed is hawkish, but not sound too hawkish to leave himself the option of cutting rates next year if the data is favorable. So Powell is in a tough spot.

However, a dovish surprise is less likely given that expectations for rate cuts are already quite advanced. And Tuesday's inflation figures and Friday's employment data showed that we can still see Dollar strength, if only for a short time. So I would be cautiously optimistic for the Dollar today.