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Dollar slides as Fed keeps rates steady, yields jump

The 10-year Treasury yield rose to 4.685% and the EUR gained 0.70% versus the dollar after the Fed signaled less forward guidance.

Reported · Written up by our desk · Major Pairs

The Federal Reserve left interest rates unchanged as expected, but Chair Kevin Warsh’s remarks underscored a continued shift away from forward guidance. Instead of mapping out a policy path, Warsh emphasized that the economy, inflation, and the bond market would determine the route for future rates, leaving markets to adjust with greater uncertainty, Forexlive reports.

Treasury yields moved higher across the curve as investors repriced the odds and timing of the next policy move. The 10-year yield climbed 8.1 basis points to 4.685%, the 30-year yield rose nearly 12 basis points to 5.211%, and the 2-year yield gained just over 1 basis point to 4.264%.

Higher yields weighed on equities, with major U.S. indexes finishing near session lows, including the Nasdaq 100 down 2.06% and the Dow down 2.19%. The U.S. dollar ended the session mostly lower, with the EUR up 0.70%, the GBP rising 0.56%, and the CAD up 0.43%, while the AUD fell 0.29% versus the greenback.

Other assets also reflected a risk and safe-haven tug of war, with crude oil up $5.30 to $84.63 on geopolitical concerns and gold adding nearly 1%. Bitcoin slipped 0.5%, as traders reacted not only to the unchanged decision but to a Fed that appears increasingly willing to step back from steering expectations.

Latest closeGold $4,134.80 ▲2.4%|WTI crude $84.41 ▲6.5%|Bitcoin $63,820.99 ▼0.1%

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