
State Street argues the US dollar could fall to multi-year lows if the Fed cuts rates more aggressively, a scenario that could shift capital toward Bitcoin and risk assets. Strategists at State Street, one of the world’s largest asset managers, say the US dollar’s worst run in nearly a decade could deepen if the Federal Reserve eases policy more aggressively than markets expect, which is a distinct possibility following a possible leadership change at the central bank. Speaking at a conference in Miami, State Street strategist Lee Ferridge said the dollar could decline by as much as 10% this year if financial conditions loosen further. While he described two rate cuts as a “reasonable base case,” he warned that the risks are skewed toward more reductions. “Three is possible,” Ferridge said. Lower US interest rates tend to reduce the appeal of dollar-denominated assets, especially for foreign investors. As rate differentials narrow, overseas investors are more likely to increase currency hedging, which involv...