Dollar Soars to Best Month Since March as Fed Fights Inflation

The US dollar wrapped up its best month since March after the Federal Reserve's renewed focus on taming inflation pushed interest-rate expectations and US bond yields higher.

The Bloomberg Dollar Spot Index has risen nearly 2% in September, surpassing June's advance. Despite slipping immediately after the Fed's preferred measure of inflation, the personal consumption expenditures price index, rose less than expected, the gauge ended higher on Wednesday.

Long-dated US Treasury yields climbed to multi-decade highs, while traders pulled back their expectations for the Fed to raise rates in October. Instead, they now fully price in a December hike, which is buoying the greenback.