Dollar Retreats as Fed Leaves Rates Unchanged Amid Rising Inflation Concerns

The US dollar retreated after the Federal Reserve left interest rates unchanged at 3.50%-3.75%, with a 7-3 vote split and three policymakers voting in favor of a rate hike.

The decision to keep rates on hold was unanimous at the June meeting, but this time around, the market reaction had the hallmarks of a bear steepener, with longer-dated yields pushing higher as investors grew increasingly concerned about the inflation outlook amid a renewed rise in oil prices.

Thirty-year Treasury bonds bore the brunt of the sell-off, with yields climbing to their highest level since 2007.