The Federal Reserve held rates steady but removed language on additional adjustments, fueling bets of a 2024 hike after GDP forecasts were trimmed.
The US Dollar Index climbed to 100.40 after the Federal Reserve kept interest rates at 3.50%-3.75% in its June decision, led by new Chair Kevin Warsh. The central bank struck a hawkish tone by omitting prior references to further rate adjustments, suggesting a shift toward a data-dependent approach.
Fed officials revised 2026 GDP growth projections downward to 2.2% from 2.4%, while the longer-run outlook remained at 2.0%. The dot plot showed a median federal funds rate of 3.8% by end-2026, up from 3.4% in March, signaling a potential rate hike this year.
The dollar strengthened most against the New Zealand Dollar, reflecting market reaction to the Fed’s cautious but hawkish stance.