The Fed held rates on 17 June 2026, but its projections moved from a cut to a hike by the end of the year. How the dollar, gold and bitcoin reacted, as at 28 June 2026.
As at 28 June 2026. Prices and market expectations are as of that date and have since changed.
For two years the question about the Fed was how fast it would cut. That changed at the meeting on 17 June 2026, the first under the new Chair.
The Federal Reserve held its policy rate at 3.50% to 3.75%, as expected. The change was in the projections. The median official now expected the rate to end 2026 at 3.8%, up from 3.4% in March. That is above the current range, so the median now implied a hike this year. Nine of the eighteen officials projected at least one increase in 2026, and only one still projected a cut. (Source: the Fed's statement and economic projections, 17 June 2026.)
What the Fed decided
The rate decision was a hold. The projections around it were hawkish.
In March the projections still leaned towards cuts. In the June dot plot (source: Federal Reserve), the dots clustered between about 3.5% and 4.2%, with one near 4.5%, and the cuts moved out to 2027 and 2028.
Officials raised their projection for PCE inflation at the end of 2026 to 3.6%, from 2.7% in March (source: the same projections). A revision of nearly a full percentage point suggests that inflation had become the committee's main concern.
The vote to hold was unanimous. The projections for the rest of the year were widely spread, and that disagreement is one reason rate expectations had become more volatile.
As at 28 June, fed funds futures priced about a 73% chance of at least one hike before the end of the year. A few months earlier the market had priced almost none.
Why the Fed changed its view
The cause was the 2026 Iran war and the rise in inflation that followed.
Brent rose above $100 while shipping through the Strait of Hormuz was disrupted. Higher energy costs fed into goods prices, freight and headline inflation. An interim US-Iran agreement was signed in mid-June, and by late June oil had fallen back towards the low $70s.
Cheaper oil helps, but the Fed's concern is different. It wants to know whether the energy shock has already pushed up services inflation, which tends to fall more slowly than fuel prices. A ceasefire can bring oil down within a week. It does not remove inflation that is already in the data. The Fed has chosen to treat that risk as real until the figures show otherwise.
The dollar after the meeting
The US Dollar Index rose back above 100 after the meeting and traded near 101 on 22 June, its highest level since May 2025. Two things supported it: the Fed's projections, and the agreement that took some of the war risk out of oil prices.
The mechanism is the yield gap. When US rates are expected to stay higher for longer, the gap widens against the euro, the pound and the yen, and that tends to support the dollar.
How that could affect the main pairs:
- EUR/USD and GBP/USD: while US rates are expected to rise, rallies in these pairs have less support from rate differentials. Softer US inflation or jobs data would change that.
- USD/JPY: the rate gap supports the pair. Comments or action from the Japanese authorities on the yen can move it sharply lower with little warning.
Gold after the meeting
Gold fell. As at late June it was about 12% below its early-June high.
The reason is the cost of holding it. A hawkish Fed tends to lift real yields and the dollar. Gold pays no interest, so when expected rates rise, the cost of holding it rises too.
The longer-term arguments for gold did not change at this meeting. They include government debt levels, central-bank buying and geopolitical risk. Gold was caught between a short-term rate signal that worked against it and longer-term demand that supported it. Which one dominated over the summer would depend mostly on the inflation data.
For the earlier part of this move, see our note from 22 May on gold holding above $4,500 despite the Fed hold.
Shares and crypto
Higher expected rates raise the discount rate that investors apply to future earnings. That usually hits the most highly valued shares first, and index CFDs with large technology weightings tend to feel it.
As at late June, bitcoin was roughly 50% below its all-time high, after ETF outflows and a stronger dollar.
The common factor is liquidity. While markets expected cuts, prices in risk assets reflected that expected easing. The June projections removed it.
What to watch next
The projections were a signal. The data due over the summer would decide whether a hike happened.
- The June jobs report, due on Thursday 2 July. A strong report would support the case for a hike. A weak one would reduce the odds. Our NFP trading guide explains how the release works and how spreads and liquidity behave around it.
- CPI and PCE inflation in July. These were the figures the Fed said it was watching most closely. Signs that the energy shock had reached services prices would support a hike.
- Speeches by Fed officials. With the committee divided, a single speech could move rate expectations. Times are on the economic calendar.
Two outcomes were possible from here. If inflation stayed high, the market would price a hike more firmly, which would tend to support the dollar and weigh on gold and bitcoin. If the ceasefire held and inflation eased by the autumn, the case for a hike would weaken and those moves could reverse.
Prices can move sharply on data days, and spreads can widen around the release. If you trade these markets, size each position so that a move against you does not take more than you are prepared to lose. The costs on each account are listed on the accounts page.
CFDs use leverage. You can lose money quickly, and you can lose all of the money you deposit. Only trade with money you can afford to lose.
Questions about the June meeting
Did the Fed signal a rate hike in 2026?
Yes. At the June 2026 meeting the median projection for the end of 2026 rose to 3.8%, above the 3.50% to 3.75% range at the time, and nine of the eighteen officials projected at least one hike in 2026, according to the Fed's projections. As at 28 June, futures priced about a 73% chance of a hike before the end of the year. The projections are forecasts, and the inflation data due over the summer decided how far they held.
What does a more hawkish Fed usually mean for currency pairs?
It usually supports the US dollar. Higher expected US rates widen the yield gap with the euro, the pound and the yen, so EUR/USD and GBP/USD tend to come under pressure while USD/JPY is supported. The pattern breaks when data surprises, and USD/JPY can also move sharply on intervention news from Japan.
How did gold react to the June projections?
Gold fell. As at late June it was about 12% below its early-June high, because higher expected rates lift real yields and the dollar, and gold pays no interest. Longer-term arguments for gold, such as central-bank buying, were unchanged by the meeting. This is market commentary, not a recommendation to buy or sell.
Why was the US dollar rising in June 2026?
Mainly because of the Fed's projections, with help from the interim US-Iran agreement, which took some of the war risk out of oil prices. The Dollar Index went back above 100 after the meeting and traded near 101 on 22 June, its highest level since May 2025.
Which releases came next after the June meeting?
The June jobs report on Thursday 2 July 2026, then the CPI and PCE inflation reports in July, ahead of the next FOMC meeting at the end of July. Speeches by Fed officials could also move rate expectations because the committee was split. The economic calendar lists release dates and times.
This is market commentary, not personal investment advice.