Fed Rate Path, AI Revenue To Drive Markets After Midterms, Says UBS’ Alli McCartney: Iran, Oil Overhang May Remain

UBS strategist Alli McCartney argues that after the U.S. midterm elections, markets are likely to be driven by the trajectory of Federal Reserve rate policy and by revenue delivered from artificial intelligence investment, while geopolitical risk involving Iran and an ongoing oil supply overhang may persist as background pressures. The primary transmission channel for the dollar runs through rate differentials: if the Fed's path remains the dominant driver, USD valuation will track shifts in expected policy easing against other central banks. Iran-related risk transmits mainly through oil prices and risk appetite, since Gulf supply concerns feed into inflation expectations, which in turn affect the rate outlook that underpins the dollar. Traders should watch the next U.S. Consumer Price Index release and Fed commentary on the policy path, as these data points will determine whether the dollar's rate-driven strength holds or fades.

The US Dollar (USD) is the world's primary reserve currency and the base for most forex majors. Headlines about Federal Reserve policy, US macro data (CPI, NFP, GDP), and Treasury yield shifts typically drive USD pair direction within seconds of release.

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