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Will trade-weighted dollar fall below 115 by June 30, 2026?
The Condition
Fed cuts ≥25bp at March 18, 2026 FOMC meeting
Our Ensemble Estimates
Given Fed cuts ≥25bp: Will trade-weighted dollar fall below 115 by June 30, 2026?
Given Fed holds: Will trade-weighted dollar fall below 115 by June 30, 2026?
Causal Effect
A Fed cut is worth ~31 percentage points to the probability of dollar falling below 115, accelerating rate differential compression — the strongest causal effect in this analysis
Why This Matters
Tests whether a rate cut accelerates dollar weakening beyond the 115 threshold identified as material for import price pass-through. The trade-weighted broad dollar is at 117.5, already down 7.6% over 12 months. A cut would widen the rate differential compression that is driving the depreciation (rate differential is the dominant factor per the analysis). Below 115 would compound tariff-driven import inflation.
Resolution Criteria
FRED series DTWEXBGS (Trade Weighted U.S. Dollar Index: Broad, Goods and Services) shows a daily closing value below 115.00 at any point between March 18, 2026 and June 30, 2026
Source Analysis
Trade-weighted broad dollar below 115 pushes 12-month depreciation beyond 9.5%, increasing import price pass-through