The US Federal Reserve maintained its base interest rate at 3.5–3.75%. Following the decision published on June 17, the dollar strengthened against all major world currencies, Reuters reports. For investors in Uzbekistan, this signals a possible continuation of tight monetary policy in the US, which affects the dynamics of the world's reserve currency.
Forex Market Reaction
The dollar index rose 0.5% and reached 100.01 points — its highest level in nearly a week. The euro weakened 0.5% to $1.1549.
Rate Expectations Shift
Financial market participants revised their forecasts: a Fed rate increase in September is now considered more likely than maintaining the current level.
Nine Fed officials expect a rate hike by the end of 2026. The regulator also raised its inflation forecast for year-end from 2.7% to 3.6%.
Stricter Regulatory Stance
According to experts, the Fed took a stricter position than the market expected. They believe officials don't anticipate significant easing of inflationary pressure due to the recent US-Iran agreement.
Communication Shift
New Fed Chair Kevin Warsh changed the regulator's communication approach. The official statement removed hints about future rate decisions. The document now contains only information on the decision taken and the intention to maintain adequate reserve levels in the banking system.
Context for Uzbekistan
According to EAEU Development Bank forecasts, the dollar exchange rate this year will be 12,200 sum.