The Dollar Index slid toward its worst weekly performance in three months, dropping 1.2% as traders questioned whether the Fed will act aggressively enough to curb inflation.

Jerome Powell’s recent testimony offered little clarity on the pace of future rate hikes, while Governor Christopher Waller signaled a preference for smaller increases.

Data showing U.S. consumer prices rose 6.4% in January reinforced concerns that inflation remains sticky, pressuring the central bank to maintain tightening.

Treasury yields retreated, with the 10-year note falling below 3.8%, reflecting diminished expectations for a 50-basis-point hike in March.