Overview
- The Federal Reserve voted unanimously on Wednesday to keep its policy rate at 3.50%–3.75% in the first FOMC meeting chaired by Kevin Warsh.
- The Fed’s dot plot moved to show more officials expecting higher rates and increased the probability of at least a 25 basis-point hike before year-end.
- Markets reacted quickly with U.S. stocks falling and Treasury yields and the dollar rising after the Fed decision and a 4.2% year-on-year U.S. inflation reading for May.
- Argentina’s market measures weakened the same day as the country-risk index rose to about 435, the retail dollar reached ARS 1,460, and the central bank continued buying dollars but slowed to roughly US$34 million in the session.
- The policy shift tightens global financial conditions by raising borrowing costs through higher U.S. yields and a stronger dollar and could force further emerging-market currency moves or additional central bank interventions, with next Fed signals and U.S. inflation data key to watch.