Currency Traders Load Up on Dollar Options After Fed Lifts 2026 Rate Forecast to 3.8%
Currency traders including hedge funds are loading up on dollar options after the Federal Reserve’s hawkish turn this week reinforced expectations for higher US interest rates. The repositioning followed the central bank’s decision, in Kevin Warsh’s first meeting as chair, to hold its benchmark rate at 3.5% to 3.75% while lifting its median end-2026 fed-funds projection to 3.8% from 3.4% in March; nine of 18 policymakers penciled in at least one hike.
The shift is spilling into foreign-exchange markets and upending global currency bets as investors adjust to a firmer US rate outlook. Warsh also said the Fed had dropped forward guidance, while updated projections raised 2026 PCE inflation to 3.6% and lowered GDP growth to 2.2%, reinforcing expectations that US borrowing costs may stay elevated.
From the sources (25 posts)
@cnbcTreasury yields fall ahead of Kevin Warsh's first Fed meeting
@businessNew Federal Reserve chief Kevin Warsh has promised an overhaul of communications
@businessThe Fed under Kevin Warsh looks likely to communicate less with investors and that may mean more market volatility.
@coinmarketcapTHIS WEEK: 🇺🇸 Fed Chair Kevin Warsh faces his debut press conference Wednesday with inflation stuck above the 2% target and markets watching for any signal on whether rate hikes are coming.
@cointelegraph🚨 UPDATE: According to Wintermute, markets are now focused on Fed Chair Kevin Warsh’s first FOMC meeting, with investors watching whether he prioritizes 4.2% headline inflation or softer core inflation and falling oil prices.
@cointelegraph⚡️ UPDATE: Markets are pricing in a 99% chance the Fed holds rates steady tomorrow, with investors focused on Kevin Warsh’s first comments as Fed Chair.
@milkroadaiRT @MilkRoadMacro: At 2pm EST today, Kevin Warsh will announce his first interest rate decision. There's currently a 99.6% chance that he…
@deitaone🚨 *FED LEAVES RATE UNCHANGED
@bulltheoryioBREAKING: The Federal Reserve leaves interest rates unchanged. This is the first Fed meeting chaired by Kevin Warsh.
@cryptorover💥 BREAKING: The Fed held rates unchanged. Now all eyes are on Kevin Warsh’s first ever FOMC speech as Fed Chair.
@tradfi*FED LEAVES INTEREST RATE UNCHANGED, WARSH TO GIVE FIRST FOMC SPEECH IN 30 MINUTES
@firstsquawkU.S. (JUN) FED INTEREST RATE DECISION ACTUAL: 3.75% VS 3.75% PREVIOUS; EST 3.75%
@maxcrypto🚨 BREAKING 🚨 🇺🇸 Fed keeps rates unchanged as expected.
@zerohedge*FED HOLDS BENCHMARK RATE IN 3.5%-3.75% RANGE IN UNANIMOUS VOTE *FED REMOVES STATEMENT REFERENCE TO ADDITIONAL RATE ADJUSTMENTS
@tradfi*FED LOWERS MEDIAN 2026 GDP PROJECTION TO 2.2% FROM 2.4%
@kobeissiletterBREAKING: The Federal Reserve leaves interest rates unchanged in its first policy decision with Kevin Warsh as Fed Chairman.
@wallstengineFED CHAIR WARSH HOLDS RATES UNCHANGED, AS EXPECTED
@zerohedge*FED: NINE OF 18 FOMC PARTICIPANTS PENCIL IN 2026 RATE HIKE
@financialjuice🔴 ⚠️ BREAKING: US INTEREST RATE DECISION ACTUAL 3.75% (FORECAST 3.75%, PREVIOUS 3.75%) $MACRO
@tradfi*FED: NINE OF 18 FOMC PARTICIPANTS PENCIL IN 2026 RATE HIKE
@deitaone*FED LOWERS MEDIAN 2026 GDP PROJECTION TO 2.2% FROM 2.4%
@gurgavin*FED LEAVES BENCHMARK RATE AT 3.75%; EST. 3.75%
@bitcoinmagazineBREAKING: 🇺🇸 Federal Reserve officially leaves interest rates unchanged.
@hedgeyeBREAKING: The Federal Reserve leaves interest rates unchanged
@deitaone*FED REMOVES STATEMENT REFERENCE TO ADDITIONAL RATE ADJUSTMENTS