Fed’s revised dot plot and inflation projections spur USD rally, lifting DXY past 101 for the first time since April.
The US Dollar Index surged past 101.00, marking its largest gain in three months, as traders repriced Fed policy expectations. The FOMC’s updated dot plot showed 9 of 18 members projecting higher rates this year, with 6 forecasting two or more hikes, fueling a bear-flattening move in Treasuries.
Two-year Treasury yields climbed to 4.20%, while EUR/USD fell below 1.15 for the first time since April. SOFR futures now price a 25 basis-point hike by October, reinforcing the dollar’s strength despite lower oil prices.
The shift in rate differentials overshadowed weaker commodity prices, pressuring currencies like the euro and yen.