What is the main reason the US dollar is expected to remain closely linked to oil prices through 2026, according to the Markets Pulse survey?

According to the Markets Pulse survey, the US dollar will likely maintain its strong link to oil prices through 2026 because the ongoing war in Iran — now in its fourth month and recently escalated with the most serious clashes since the April ceasefire — is keeping crude prices elevated, thereby sustaining the unusual tandem movement between the dollar and Brent crude futures.

What do survey respondents predict about the Federal Reserve's monetary policy stance for 2026, and what key factor is complicating that outlook?

Survey respondents assigned the highest probability — about 45% — to no change in Fed monetary policy in 2026, with a 25% chance of one rate hike; Fed funds futures, however, price a roughly 60% chance of one increase by December. The jump in inflation caused by the oil shock is complicating the outlook for new Fed Chairman Kevin Warsh, whose historically hawkish but recently dovish stance — aligned with President Trump’s calls for lower rates — is likely to keep the Fed in a wait-and-see mode this year.

Dollar's Lockstep Moves With Oil to Last in 2026: Markets Pulse

Jun 4, 2026

A Markets Pulse survey predicts the US dollar will maintain its strong correlation with oil prices through 2026 due to ongoing tensions in Iran. Analysts expect Brent crude to average over $90 per barrel, complicating Federal Reserve monetary policy decisions.

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