Breaking: Fed hikes policy rate by 25 bps to 5-5.25% as expected


The US Federal Reserve (Fed) announced on Wednesday that it raised the policy rate, federal funds rate, by 25 basis points to the range of 5-5.25% following the May policy meeting. This decision came in line with the market expectation.

In its policy statement, the Fed dropped language that it 'anticipates' more policy firming may be appropriate to attain 'sufficiently restrictive' stance.

Follow our live coverage of the Fed's policy announcements and the market reaction.

Market reaction

With the initial reaction, the US Dollar came under renewed bearish pressure and the US Dollar Index declined toward 101.00.

Key takeaways from the policy statement

"In determining the extent to which additional policy firming may be appropriate, will take into account tightening to date, policy lags and other developments."

"US banking system is sound and resilient."

"Tighter credit conditions likely to weigh on economy, hiring and inflation."

"Job gains have been robust, inflation remains elevated."

"Will continue reducing balance sheet as planned."

"Vote in favor of policy was unanimous."

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD accelerates its rebound to the 1.0930 region, focus remains on US election

EUR/USD accelerates its rebound to the 1.0930 region, focus remains on US election

Further selling pressure continues to hurt the US Dollar and lends extra support to EUR/USD, motivating it to flirt with the area of four-week peaks past 1.0930, as the US election remains under way.

EUR/USD News
GBP/USD approaches 1.3050 on weaker Dollar, US election

GBP/USD approaches 1.3050 on weaker Dollar, US election

Further optimism around the British pound and the broad risk complex lends extra legs to GBP/USD and sends it to new multi-day highs near the 1.3050 zone as investors continue to closely follow the developments around the US election.

GBP/USD News
Gold extends consolidative phase as US election result looms

Gold extends consolidative phase as US election result looms

Gold attracts dip-buyers after touching a one-week low on Tuesday but remains below $2,750. The benchmark 10-year US Treasury bond yield stays in positive territory above 4.3% as markets eye US election exit polls, limiting XAU/USD's upside.

Gold News
Crypto markets brace for volatility in tight race between Trump and Harris

Crypto markets brace for volatility in tight race between Trump and Harris

The US presidential election is one of the most significant events in the world. Due to the influence of the country’s political decisions, policies, and economic approaches, it can significantly impact crypto and global markets. 

Read more
US election day – A traders’ guide

US election day – A traders’ guide

Election day volatility: Brace for potential wild market swings. Election days bring opportunities, but also risks. Unclear results can increase volatility further.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures