The dollar index initially fell to its lowest level since 2022 before recovering to trade higher at 96.8 on Wednesday, as traders digested the latest FOMC decision. The Fed cut the funds rate by 25 bps, as expected - the first reduction in borrowing costs this year - while signaling an additional 50 bps of cuts before year-end, slightly more than projected in June. At the press conference however, Chair Powell noted that risks of higher and more persistent inflation have eased since April, framing today’s move as a ‘risk management’ cut rather than the start of a new easing cycle. Meanwhile, only newly appointed Governor Stephen Miran voted for a larger 50 bps cut, resulting in fewer dissents than markets had anticipated.