Resources · Policy
The Fed’s first hike since 2023 reprices the dollar
A unanimous 25 bp lift to 3.75–4.00% and a hawkish dot plot sent the dollar index through 100. The curve now prices another move as soon as October. Desk colour, not a trade.
6 min read · 17 September 2026
What printed
The FOMC raised the funds target by 25 basis points to 3.75–4.00% — the first increase since 2023 — in a unanimous vote. Chair Kevin Warsh framed it as reducing a “dose of accommodation,” not as a one-and-done. Staff lifted the 2026 core PCE forecast and the longer-run funds rate. Twelve of eighteen participants project at least one more hike this year.
How the tape answered
The dollar index rose more than 1% on the week and held above 100 into Monday 21 September. Two-year yields jumped. CME FedWatch showed roughly a 55% chance of an October hike, up from the low-40s a week earlier. EUR/USD slipped through 1.1500. USD/JPY tagged two-week highs above 158 before a suspected Tokyo rate check.
What the desk watches next
The differential, not the press conference. If the two-year spread versus Europe and Japan keeps widening, the dollar can grind. If oil and the Middle East ceasefire talk knock inflation prints, October odds fade and DXY gives back the 100 handle. Chicago Fed activity is on today’s US card; it will not rewrite the dots.
Risk note
A hawkish Fed is a rates story, not a licence to size USD longs. Stops still gap around data. This note is education for a desk you already run — not a recommendation to buy or sell the dollar.
These notes are education, not a recommendation to trade, and not a solicitation. Leveraged FX can return a total loss of capital, quickly. Nothing here is personal advice. SummitFx does not hold client funds. Read the risk disclosure.