The Federal Open Market Committee unanimously voted to increase the benchmark interest rate by 0.25 percentage points to a range of 3.75% to 4%. The Fed’s dot plot—showing policymakers’ forecasts for future rate movements—indicates another rate hike may occur this year.
Chairman Kevin Warsh’s determination to tackle inflation boosted market confidence, narrowing losses in U.S. Treasuries and pushing U.S. stock index futures higher. This marks the first rate hike by the Fed since 2023.
Yields on two-year U.S. Treasury notes, which are sensitive to interest rates, surged after the Fed’s move to their highest level since early 2024 before easing slightly by one basis point to 4.72%. Benchmark 10-year and 30-year Treasury yields both declined by about two basis points. Asian bonds reversed earlier losses and followed U.S. Treasuries higher.
Futures for the S&P 500 and Nasdaq 100 rose more than 0.6%.
Warsh reinforced the Fed’s credibility in fighting inflation, evident from the strengthening dollar, and more importantly, the long end of the U.S. Treasury yield curve did not experience disorderly upward movement.
With the Fed signaling another rate hike this year, upcoming economic data will be closely watched ahead of October’s meeting.
Markets remain aware of growth risks posed by tightening policy. However, equities reacted relatively calmly, with technology stocks showing resilience and overall Asian market sentiment turning calm, indicating investors are relieved that the Fed’s hawkish stance has not triggered another surge in long-term yields.
Gold prices rebounded to around $4,280 per ounce after three consecutive days of decline.
Warsh reiterated his anti-inflation stance from last month’s Jackson Hole meeting, stating Wednesday that too many categories of goods and services have seen annualized price increases exceeding 3% over the past six months and twelve months.
President Donald Trump took to social media after the decision, saying U.S. interest rates should be at 1% or lower, though he did not directly criticize Warsh.
Plugin Case Analysis
Gold: Prices successfully reversed overnight. Today’s key focus is reclaiming the supply zone resistance near 4,320 left during the morning session. If this level is reclaimed and held, further upside could target 4,335/4,350.
(Gold 15-minute chart)
Nasdaq: After the yellow zone liquidity sweep we flagged yesterday via our plugin, a perfectly timed V-shaped reversal occurred as expected. Today, monitor the sideways structure around 29,100/29,200; if momentum signals emerge for a breakout, continue to participate.
(Nasdaq 15-minute chart)
Crude Oil: Prices gradually pulled back to the 101/102 range, currently consolidating. Watch for confirmation signals following a breakdown below, or wait for a pullback after testing the yellow zone liquidity.
(Crude oil 15-minute chart)
Key Financial Data & Events Today:
20:30 U.S. Initial Jobless Claims for the Week Ending September 12 (in thousands)
