Brown Brothers Harriman’s (BBH) Elias Haddad notes the US Dollar is trading sideways as a lack of policy-relevant data keeps FX ranges contained, even as S&P500 futures signal further equity weakness and Treasury yields fall below 4.00%. He highlights safe-haven demand, fading inflation risks, and soft domestic demand, while the Fed is seen able to stay patient on rate cuts.

Fed patience as yields signal caution

"USD continues to trade sideways in the absence of policy-relevant economic data releases."

"Treasuries are up with the 10-year note below 4.00% for the first time since end-November 2025."

"The decline in Treasury yields reflects increased safe haven demand (perhaps a hedge against the so-called AI scare trade) as breakeven inflation rates remain steady."

"Fed Governor Stephen Miran reiterated his call for more aggressive rate cuts yesterday. Miran said “four cuts [100bps this year], I think, are appropriate, and I’d rather get them sooner than later.” Fed funds futures continue to fully price-in 50bps of easing by year-end, which is reasonable in our view."

"Nonetheless, the Fed can afford to be patient before resuming cutting rates."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)