State Street Corp.'s Lee Ferridge forecasts a 10% decline in the U.S. dollar this year as the Federal Reserve may cut interest rates more deeply than markets expect when the next central bank chair takes over. The prediction comes amid growing uncertainty about monetary policy direction.

Ferridge's analysis suggests that market expectations for Fed rate cuts may be too conservative, potentially leading to a sharper depreciation of the greenback. The dollar has already weakened significantly in recent months as investors price in multiple rate reductions, but Ferridge sees further downside risk.

A 10% drop would represent a substantial move for the world's reserve currency, potentially impacting global trade flows and emerging market dynamics. Currency traders and multinational corporations will be watching Fed signals closely, as deeper cuts could accelerate capital outflows from dollar-denominated assets and reshape international investment patterns.