Fed Hike Sends USD/JPY Pair to Fresh Weekly Highs
The Japanese Yen (JPY) has fallen against the US Dollar (USD) as the Federal Reserve delivered its expected interest rate hike of 25 basis points. This move has sent the USD/JPY pair to fresh weekly highs, trading at around 155.50.
According to the Summary of Economic Projections, policymakers expect at least one more rate hike before the end of this year. Out of 18 officials, 12 anticipate another 25 basis point hike, while four officials predict two hikes. Only two members believe there will be no further moves in 2026.
The projections also show that inflation is still a concern, with policymakers anticipating end-2026 PCE inflation at 3.7% versus 3.6% in June, and core inflation at 3.4% versus 3.3%. Employment is expected to improve slightly, with an anticipated unemployment rate of 4.1% by the end of 2026.
In terms of GDP growth, officials see a 2.3% expansion in 2026 versus 2.2% in June, and longer-run growth at 2.0%.