USD Slides as Fed Holds Rates Steady Amid Dissent

The Federal Reserve (Fed) maintained its interest rate target at 3.5%, 3.75%, but three committee members dissented, calling for a 25 basis point hike.

This decision was seen as not hawkish enough by many market participants, leading to the US dollar's decline across the board.

Fed funds futures still suggest a September rate hike is likely, with an implied probability of 36.2% for a second hike in March.

Wall Street Journal economist Lael Brainard emphasized that inflation remains elevated relative to the committee's 2% target, making a September hike seem probable unless incoming employment and inflation data weaken sufficiently.