The dollar scored a 2-month high hot on the heels of its strongest rise in 15 months, Wall Street looked set for a bumpy restart and 10-year US Treasury yields - a key driver of global borrowing costs- consolidated their biggest rise since early March.
While these "dot plots" are not commitments and have a poor track record of predicting rates, the sudden shift was a shock. Markets moved quickly to price in the risk of earlier action and Fed fund futures shifted to imply a first hike by the end of 2022. Yields on 10-year bonds shot up almost nine basis points overnight to as high as 1.57 percent.
Agnès Belaisch, Chief European Strategist of the Barings Investment Institute, said the fact that the Fed was not going to lift rates any time soon was good for world growth and that FX markets would therefore get over Wednesday's shift.