The dollar index traded around 104.1 on Thursday, holding on to its recent declines and tracking Treasury yields lower, amid growing concerns of a possible recession. Federal Reserve Chair Jerome Powell said in a testimony to Congress that the central bank is fully committed to bringing prices under control, even at the risk of an economic downturn. He acknowledged that a recession was “certainly a possibility,” reflecting market concerns that the Fed’s aggressive monetary tightening would hamper growth. Powell also said that the Fed will keep raising interest rates following a 75 basis point increase last week, the largest since 1994, as inflation surprised to the upside over the past year, and further surprises could be in store. Analysts expect the Fed to deliver another 75 basis point rate hike in July, followed by a 50 basis point increase in September.
