Hawkish Fed lifts dollar to seven-week high; markets brace for BOE, BOJ

reuters.com

Top Stories Interviews Business Finance Banking Technology Investing Trading Videos Awards Magazines Headlines Trends

Global Banking & Finance Awards® 2026 · Nominations open, free to enter Nominate now →

Editorial & Advertiser disclosure Global Banking & Finance Review® is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

› Shares edge up after Fed hike, dollar firm on short-term yields

Finance Shares edge up after Fed hike, dollar firm on short-term yields

Published by Global Banking & Finance Review

Asian shares edged slightly higher as the Federal Reserve delivered its first rate hike since mid‑2023, boosting the U.S. dollar to a seven‑week high amid rising short‑term Treasury yields. Oil prices dipped on eased Middle East supply concerns as Saudi Arabia offered crude via Oman.

Market Reactions to Fed Rate Hike and Dollar Strength

Market Expectations for Future Rate Hikes

Treasury Yields and U.S. Dollar Performance

Shares Rise in Asia Following Fed Rate Hike as Dollar Strengthens on Yields

Market Reactions to Fed Rate Hike and Dollar Strength

SYDNEY, Sept 17 (Reuters) - Shares edged up in Asia on Thursday as investors bet the Federal Reserve is finally getting the jump on inflation, delivering its first rate hike in more than three years and calming a global bond selloff that had sent long-term yields soaring.

The U.S. dollar hit a seven-week high against its major peers, underpinned by a jump in short-term Treasury yields as markets ramped up wagers that the Fed may have to lift rates again, with a move by December fully priced in. That proved a headwind for commodities, with oil prices giving back ground.

The focus now shifts to the Bank of England, which is widely expected to leave interest rates steady later in the day, but all eyes will be on any hint about if high energy prices could force it to hike in November. The Bank of Japan, by contrast, is all but certain to lift interest rates on Friday.

European shares are set for a higher open, with pan-region stock futures up 0.5%. Nasdaq futures gained 0.7% and S&P 500 futures bounced 0.6%, after small declines on Wall Street. [.N]

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3% while Japan's Nikkei also gained 0.3%. Chinese blue-chips slipped 0.2% and Hong Kong's Hang Seng fell 0.7%.

As widely expected, the Fed raised interest rates by a quarter point overnight, but the unanimous decision tilted to the hawkish side. The dot plot projected one more rate hike this year but stopped short of signalling any moves next year.

Tai Hui, APAC chief market strategist at JPMorgan Asset Management, said investors would need to reassess the valuations for assets especially tech stocks if the Fed remained hawkish going into 2027.

"We think the chance of U.S. policy rates returning to above 5% is still limited. Nonetheless, a catalyst to extend the equity bull market is looking unlikely in the foreseeable future," he added.

Market Expectations for Future Rate Hikes

Futures imply there is a 53% chance that the Fed could follow up with a second hike as soon as next month to rein in inflation. A total of three rate rises have been priced in for this tightening cycle.

Treasury Yields and U.S. Dollar Performance

The Treasury yield curve bear flattened, with short-term maturities taking a hit but long bonds heaving a sigh of relief. Two-year Treasury yields slipped 1 basis point to 4.7174%, after spiking 6 basis points overnight to the highest since July 2024.

That helped boost the U.S. dollar to a seven-week high of 100.36 against its major peers, having surged 0.7% overnight, the biggest daily gain in three months.

The yield on benchmark U.S. 10-year notes was back at 5%, having dipped to as low as 4.9385% overnight, while 30-year bond yields were flat at 5.3522%, off from a 19-year high of 5.401%.

"Chair Warsh will be pleased that the breakout of the 10-year yield shows a moderate fall in inflation expectations, which telegraphs a nod of approval from the market to the hike as an inflation containment one," said Padhraic Garvey, regional head of research, Americas, at ING.

"It was still an eloquent performance. But it won't rescue the back end of the curve. We identify 5.25% as a next target for the U.S. 10-year yield."

Commodity markets took a hit on the stronger dollar. Brent crude futures slipped 0.2% to $105.67 a barrel after falling 2.7% overnight as Saudi Arabia was reportedly offering crude cargoes through Oman, easing some concerns about Middle East supply disruption.[O/R]

Gold, however, showed some resilience, rising 0.7% to $4,293 an ounce, offsetting a similar fall overnight. [GOL/]

The day's essential banking & finance news, free to your inbox.

Federal Reserve raised rates by 25 basis points—the first hike in over three years—and projected another hike before year‑end, firming short‑term yields and reinforcing dollar strength ( au.marketscreener.com )

Asia‑Pacific equities gained modestly, with the MSCI APAC index up ~0.4%, as investors interpreted the Fed move as timely inflation control and bond sell‑off cooling ( au.marketscreener.com )

Brent crude slipped (~2–3%) after Saudi Arabia offered additional crude shipments via Oman, easing market supply tension; U.S. crude inventories also weighed on prices ( live.euronext.com )

Shares tick higher as Fed hikes rates, dollar jumps with short-term yields | MarketScreener Australia

Oil slips as Saudi Arabia offers more crude via Oman | live

Why did the Federal Reserve raise interest rates? The Federal Reserve raised interest rates to get ahead of inflation and respond to rising price pressures in the economy.

How did markets react to the Fed's rate hike? Asian shares edged up, US dollar hit a seven-week high, and short-term Treasury yields increased following the rate hike.

What is the outlook for further interest rate hikes? Markets are pricing in a possible additional Fed rate hike by December, with futures implying a 53% chance of another increase as soon as next month.

How did commodity prices respond to the stronger dollar? Brent crude oil prices slipped and gold showed resilience after the US dollar strengthened on higher short-term yields.

What central bank meetings are markets watching next? Markets are focusing on upcoming Bank of England and Bank of Japan meetings for possible policy shifts.

Previous Finance Post EU seeks China curbs on hybrid car exports to avert trade row, FT reports

Next Finance Post Global LNG prices could spike this winter on low European gas stocks

AI military risks spark concern at China security conference

UK's Capricorn Energy agrees to revised terms of $396 million takeover offer from DNO

UK watchdog probes AkzoNobel's $25 billion Axalta merger

Oil prices extend losses on easing fears of Middle East supply disruption

Poland's Allegro boosts 2026 outlook as growth accelerates

Volvo Cars to launch 13 new models this decade, eyes earnings boost

UK's Next nudges up profit guidance but expects sales growth to slow

CSG says fire at Slovak ammunition body plant broke out during reconstruction

UK's Debenhams posts higher interim profit as key brands return to growth

Trump derides EU pitch to Canada as 'laughable', threatens more tariffs

Healthcare firm Ramsay Generale de Sante sees 2027 revenue rising by up to 3%

Wizz Air trims second-half planned capacity by 5% on fuel price volatility

Germany machinery sector to see fourth year of decline in 2026, VDMA says

Germany's east-west divide shifts from jobs to wealth

Exclusive-LVMH signed a secret 2002 pact to buy Hermès heir’s shares. Now he says his fortune is missing

Australia cracks down on student and backpacker visas to curb migration

Hawkish Fed lifts dollar to seven-week high; markets brace for BOE, BOJ

Global LNG prices could spike this winter on low European gas stocks

The day's essential banking & finance news, free to your inbox.

Authoritative analysis on banking, capital markets and fintech —

Original content: Global Banking and Finance Review - https://www.globalbankingandfinance.com

A global financial intelligence and recognition platform delivering authoritative insights,

data-driven analysis, and institutional benchmarking across Banking, Capital Markets,

Investment, Technology, and Financial Infrastructure.

Copyright © 2010-2026 - All Rights Reserved. | Sitemap | Tags