The dollar index dropped below 99.0 on Wednesday, moving closer to its lowest level since late October, after the Federal Reserve delivered the anticipated 25-basis-point rate cut but pointed to only one rate reduction in 2026. More notably, a tweak in the Fed’s statement, citing “the extent and timing of additional adjustments”, suggests officials are likely to pause further cuts in January as they wait for additional data to better assess the economic outlook. The latest projections show a meaningful upgrade to the growth outlook. Policymakers now expect the economy to expand 2.3% next year, up from the 1.8% forecast in September. Growth in 2027 is also seen slightly higher, at 2% versus 1.9% previously. Meanwhile, the Fed lowered its inflation forecasts for 2025 to 2.5% from 2.6% and for 2026 to 2.4% from 2.6%, though both remain above the central bank’s 2% target.