The US Dollar Index (DXY) trades near 101.25 amid a hawkish Federal Reserve policy stance, with the September 16 rate hike lifting the target range to 3.75-4.00% and median projections pointing to 4.1% by year-end 2026. Persistent inflation—PCE at 3.7% and core at 3.4% for 2026—combined with stable labor conditions (unemployment near 4.1%) and geopolitical tensions have reinforced safe-haven demand and supported recent gains of roughly 2% over the past month. Treasury yields remain elevated, widening rate differentials versus major peers and underpinning trader positioning. Key near-term catalysts include the October 2 employment report, October 14 CPI release, and the late-October FOMC meeting, where further tightening signals or softer data could shift implied probabilities around year-end levels.