The Federal Reserve is likely to start cutting interest rates in September, but any dollar depreciation will be limited. The bank's FX strategists say the dollar's rebound in 2021-2022 provides ample room for a downward correction, but unless the U.S. economy slows much more than expected, it is "highly unlikely" that U.S. interest rates will approach levels seen before the COVID-19 pandemic in 2020. They say the biggest move should be in the dollar against the yen, which could fall to 140 in early 2025 from the current 156.197. The yen is the currency hardest hit by rising U.S. interest rates and yields. They say that sometime in 2024 or 2025, the euro could rise to 1.15 against the dollar from its current level of 1.0850.