In the European session on Tuesday (Oct. 25), the low recovered to trade at 111.98, down 0.02%.
The analysis points to aggressive action being taken to slow economic growth in the face of persistently high inflation.
At its September meeting, the Fed raised its target range for federal funds by 75 basis points to between 3% and 3.25%.
In June, officials expected a year-end rate of 3.4%. Now they expect 4.4%.
The Fed used the dot plot to send a strong signal to the market that future rate hikes would be larger and longer.
The median forecast for the federal funds rate by the end of 2022 is 4.4%, and the median forecast for the federal funds rate by the end of 2023 and 2024 is 4.6% and 3.9%, respectively.
Expectations suggest at least one more 75 basis point rate hike in 2022, with no rate cut expected until 2024.
Policymakers believe inflation will slowly return to the Fed’s 2% target in 2025, and interest rates may not be cut until 2024.
The dollar index remained hovering around 111.85, falling to session lows, while struggling to extend gains made at the start of the week in Asia on Tuesday.
