Fed Hikes Rates Again, Dollar Index Surges Above 100

The US Federal Reserve has raised interest rates by 25 basis points to 3.75-4.00%, marking its first rate increase since 2023.

Fed Chair Kevin Warsh emphasized that the decision reflected a combination of a resilient US economy, insufficient improvement in inflation, and geopolitical developments.

The hawkish tone initially pushed Treasury yields and the dollar index higher, while weighing on equities and gold. However, the reaction reversed as markets assessed how much tightening is already priced in.