Dollar holds gains as Fed warns on inflation risks
In short
The US dollar stayed firm after a stronger-than-expected inflation report. Federal Reserve comments pointed to possible rate hikes, and traders are now leaning toward a hike at the next policy meeting.
The rise in Treasury yields added pressure on markets. Bitcoin and ether also traded near three-month lows.
What the reporting says
The US dollar held onto gains after a stronger-than-expected inflation report, while Federal Reserve comments pointed to possible rate hikes to tackle persistent inflation. Traders are pricing in a hike at the next policy meeting, and the US 10-year Treasury yield rose as markets adjusted. Bitcoin and ether also traded near three-month lows during the move.
Why it matters
The dollar extended gains after a stronger-than-expected inflation reading, and Fed comments signaled that rate hikes may still be used to fight inflation. Traders have shifted expectations toward a hike at the upcoming policy meeting, while the US 10-year Treasury yield moved higher. The move also weighed on cryptocurrencies, with bitcoin and ether near three-month lows.