Fed Holds Rates, Dot Plot Signals Possible 2026 Hike, Dollar Gains

The Federal Reserve left the benchmark interest rate unchanged in the 3.5-3.75% range at its June 17 meeting, a decision that was fully anticipated by markets.

However, the accompanying dot plot projections showed a tilt toward tighter policy, with the median forecast indicating that at least one rate increase by the end of 2026 is now more probable than many participants had previously expected. This hawkish signal helped lift the US dollar against major peers.