The dollar climbed in tandem with rising Treasury yields on Wednesday as a surprisingly high reading for U.S. inflation threatened to give a hawkish tilt to the Federal Reserve’s policy outlook later in the session.
The Fed’s two-day policy meeting ends with a statement at 1800 GMT, followed half an hour later by a news conference with Chair Janet Yellen. The central bank will also provide its latest forecasts for growth, inflation and interest rates. While economic growth has disappointed so far this year, signs of an acceleration in inflation could bring forward the day when the Fed might consider hiking rates.
The U.S. consumer price index increased 0.4 percent in May, twice the gain expected, driven in large part by rising airfares and hotel rates. Core inflation rose 0.3 percent in the biggest monthly rise since late 2009.