HONG KONG: The dollar built on gains against the yen on Thursday (Sep 21) after the Federal Reserve unveiled plans to wind down its crisis-era stimulus and hinted at another interest rate hike before the end of the year.
Fed boss Janet Yellen said the world’s biggest economy was “performing well” while it emerged after a closely watched meeting that most members of the policy board wanted to lift borrowing costs by December.
The central bank also announced it would next month begin cutting back on its holdings of bonds and other assets built up as part of a scheme to keep rates low and steer the economy through the global financial crisis a decade ago.
Yellen said policymakers would react accordingly to any negative impacts on the economy, adding that persistently low inflation would likely come to an end.
She also said if prices rose too quickly the bank would be able to lift rates quicker.
“It doesn’t get any more brazenly hawkish from Dr Yellen, who along with the majority of her colleagues is clearly in the December rate hike camp and the markets are reacting to this news,” said Stephen Innes, head of Asia-Pacific trading at OANDA.