The US Dollar is under pressure while traders price out the Federal Reserve´s hawkish stance due to a dovish rate hike of just 25 basis points. Additionally, traders are moving out of the greenback due to less hawkish language in the Federal Open Market committee´s statement and forward guidance from Federal Reserve´s Jerome Powell during his presser.
Before today´s Federal Reserve event, markets were pricing in a year-end target rate of 4.36%. This has dropped in volatile reactions to the statement to 4.26%. At the time of writing, US 2-year Treasury yields are down to 4.77%, dropping from 4.259% on the day to print a low of 3.958%. Consequently, the US Dollar index, DXY, fell to a low of 102.065 from a high of 103.265.
Fed event highlights
The median forecast shows rates at 5.1% end-2023, 4.3% end-2024.
'Some additional policy firming may be appropriate.'
FOMC deletes reference to ongoing increases.
US banks are sound, resilient but events to weigh on growth.
Likely to see tighter credit conditions that weigh on economic activity, hiring and inflation.
Meanwhile, Federal Reserve chairman Jerome Powell is speaking to the press in an event that started at 18.30GMT.
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