Breaking: Fed hikes policy rate by 25 bps to 4.5-4.75% as expected

FXStreet Team FXStreet

The US Federal Reserve on Wednesday announced that it raised the policy rate, federal funds rate, by 25 basis points to the range of 4.5-4.75% following the first policy meeting of 2023. This decision came in line with the market expectation.

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

In the policy statement, the Fed noted that 'ongoing increases' in rates will be appropriate and added that inflation remains elevated despite having eased somewhat.

Market reaction

The US Dollar Index edged slightly higher with the immediate reaction but quickly erased its gains as investors await FOMC Chairman Jerome Powell's press conference. As of writing, the index was down 0.26% on the day at 101.82.

Key takeaways from policy statement, via Reuters

"In determining the extent of future rate hikes, will take into account cumulative tightening, policy lags, and economic and financial developments."

"Recent indicators point to modest growth in spending and production."

"Job gains have been robust in recent months, unemployment rate has remained low."

"Russia's war against Ukraine is contributing to elevated global uncertainty, Fed remains highly attentive to inflation risks."

"Will continue reducing the balance sheet as planned."

"Vote in favor of policy was unanimous."

Author

FXStreet Team

FXStreet

EUR/USD slumps below 1.1800 on hawkish Fed Minutes, eyes on ECB succession

The EUR/USD pair tumbles to a near two-week low around 1.1785 during the early Asian session on Thursday. The US Dollar strengthens against the Euro on hawkish FOMC minutes that revived speculation about potential interest rate hikes if inflation remains elevated.

GBP/USD extends decline as weak jobs data bolsters BoE rate cut bets

The Pound Sterling continued to backslide under sustained pressure on Wednesday, following through after the UK employment report on Tuesday showed a labour market deteriorating faster than expected.

Gold consolidates the rebound below $5,000, US data eyed

Gold price consolidates the previous rebound below $5,000 in the Asian session on Thursday. The precious metal recovered on Wednesday amid shifts in geopolitical sentiment, boosting safe-haven demand. Traders will keep an eye on the release of US Initial Jobless Claims, Pending Home Sales data, and the Fedspeak later on Thursday.

Bitcoin approaches a critical zone: Bear pennant projects $56,000

Based on the most recent analyses from February 2026, the short answer is that it is highly unlikely that Bitcoin will reach $100,000 this month.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.