The Fed left its benchmark rate of interest and pace of asset purchases unchanged as widely anticipated, but markets seem to be responding to information shown in the updated dot plot. FOMC officials now see two interest rate hikes by the end of 2023 based on the Fed dot plot. This stands to bring forward the Fed taper deadline, that will be sending the US Dollar and Treasury bond yields sharply higher in turn.
The wider DXY Index currently trades about 0.5% higher on the session and in its lowest level since early May. The return on ten-year Treasury bonds is up 5-basis points to 1.53%. Markets now tune in to Fed Chair Powell that will provide additional color on policy advice throughout his follow up media conference.
