Federal Reserve officials signal one more rate increase in 2024, reinforcing USD strength against the yen amid persistent inflation concerns.
The Japanese yen fell against the US dollar after the Federal Reserve maintained rates but projected one additional hike by year-end. USD/JPY climbed to 160.66, recovering from a daily low of 160.11, as Fed officials emphasized inflation remains above the 2% target.
The Fed’s latest dot plot showed most policymakers expect higher rates to persist, contrasting with prior projections. Chair Kevin Warsh avoided forward guidance but stressed unanimous commitment to price stability, noting inflation control requires further action.
Markets reacted by extending the dollar’s yield advantage, with the yen weakening as US Treasury yields firmed. The Fed also announced a framework review, including task forces on inflation and employment data.