Today's US session brings three key events for the dollar — each important in its own way.

First, the final University of Michigan data for May. The preliminary reading showed the consumer sentiment index at 48.2 — a record low, below April's 49.8 and below the 49.5 forecast. The final release is due today, and the market doesn't expect surprises: consensus for the current conditions index is 47.8, for consumer expectations 48.5, for one?year inflation expectations 4.5% (vs. 4.7% previously) and for five?year expectations 3.4%.

Interestingly, inflation expectations now matter more than the sentiment index itself. Annual expectations at 4.5% still notably exceed the 3.4% levels recorded in February before the Iran war and are far above the pre-pandemic 2.3–3.0% range. This is the metric the Fed watches closely. If the final figure comes in above the preliminary — for example, returning to 4.7% or higher — the dollar would gain support on bets of tougher Fed rhetoric. If the data confirm the prelims or prove slightly softer, the reaction should be muted — the market has largely priced this in.

The second point is a speech by FOMC member Christopher Waller. Let me remind you that Mr. Waller previously called the idea of returning to a deficit reserves regime "stupidity," openly opposing plans by the incoming Fed chair. Today's remarks are interesting primarily in the inflation context: if he signals a more hawkish stance than implied by the May minutes, the dollar could get an extra push by the weekend. If he sticks to cautious language, the market will take it as confirmation of the regulator's wait-and-see stance.

Finally, the third and perhaps most significant event of the day is Kevin Warsh's inauguration as the new Fed chair. The Senate confirmed him by the narrowest of margins, and the leadership change comes at an extremely awkward moment: inflation has accelerated to its highest levels since 2023, the May minutes recorded readiness among most committee members to consider rate hikes, and market expectations for tightening have risen toward March next year. Warsh is known as a proponent of substantial balance sheet reduction and overall tighter policy, and the market will watch his first public comments in the new role closely. On the other hand, Warsh's prior pledges to President Trump to cut interest rates present a dilemma: delivering on such promises now would be extremely difficult.

Warsh's arrival is unlikely to be an unambiguously positive long-term signal for the dollar. Short-term reaction will depend on the tone of his initial statements. If he endorses a tough course similar to Powell's, the dollar will gain support; if he opts for cautious wording to avoid stoking market nerves, the reaction will be muted. In any case, today is an important marker for the Fed's likely direction under new leadership.