USD – The dollar rose on Wednesday after the Federal Reserve said it would end its pandemic-era bond purchases in March next year, paving the way for a new cycle of policy tightening and rate normalization.
Reuters summarized the Fed’s announcement, stating that “officials at the median projected the US central bank’s benchmark overnight interest rate would need to rise from its current near-zero level to 0.90% by the end of 2022. That would kick off a hiking cycle that would see the Fed’s policy rate climb to 1.6% in 2023 and 2.1% in 2024 – nearing but never exceeding levels it would consider restrictive of economic activity.”
Reuters summarized the Fed’s announcement, stating that “officials at the median projected the US central bank’s benchmark overnight interest rate would need to rise from its current near-zero level to 0.90% by the end of 2022. That would kick off a hiking cycle that would see the Fed’s policy rate climb to 1.6% in 2023 and 2.1% in 2024 – nearing but never exceeding levels it would consider restrictive of economic activity.”