17.09.202601:37:32UTC+00Dollar Towers on Hawkish Fed View

The dollar index hovered around 100.3 on Thursday, steady near a seven-week high after a sharp gain in the previous session. The move followed the Federal Reserve’s first interest rate increase in three years and its signal of further tightening this year to rein in inflation.

As expected, the FOMC voted unanimously to raise the federal funds rate by 25 basis points to a target range of 3.75%–4.00%. Fed Chair Kevin Warsh stressed that inflation remains unacceptably high, reinforcing expectations of additional rate hikes. Supporting that view, data released last week showed that core US inflation for August rose more than anticipated.

In contrast, President Donald used a social media post to urge a rapid cut in interest rates to 1% or below, although he stopped short of directly criticizing Warsh.

Elsewhere, the Bank of England is widely expected to leave interest rates unchanged at its meeting today, while the Bank of Japan is scheduled to raise rates on Friday.

On the geopolitical front, oil prices eased amid optimism that Saudi Arabia will be able to restore energy flows through its East–West pipeline, alleviating some concerns over supply disruptions.