Dollar jumps as Fed holds rates but projects one hike later this year

The US Federal Reserve held its policy rate at 3.50-3.75 percent but turned sharply hawkish, with new projections from nine officials now anticipating a rate hike by end of 2026 and inflation outlook revised up from 2.7 percent to 3.6 percent. New Fed Chair Kevin Warsh removed all forward guidance from the statement, marking a dramatic shift in communication strategy. The dollar index rose 0.5 percent to 100.01, the euro fell to 1.1549 dollars, and US equity markets tumbled, with Nasdaq and S&P 500 falling over 1 percent, signalling risk-off sentiment that pressures emerging markets including India through stronger dollar and potential FII outflows.