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Ammon News - The dollar weakened and the yen rebounded from near multi-decade lows on Wednesday after the Federal Reserve held interest rates steady as expected and policymakers still projected three U.S. rate cuts this year even as inflation remains elevated.

The Fed's updated quarterly economic projections showed the personal consumption expenditures price index excluding food and energy rising at a 2.6% rate by year-end, compared to 2.4% in the projections the U.S. central bank issued in December.

The new policy view also raised the outlook for the U.S. economy. Policymakers now see growth at 2.1% this year compared to 1.4% projected in December, while the unemployment rate is seen ending 2024 at 4%, versus 4.1% anticipated late last year.

The dollar index , a measure of the U.S. currency against six major trading partners, eased 0.46%. The yen reversed an earlier decline as the U.S. currency fell 0.17% to 151.10 yen.

"There aren't too many ways you can reconcile that, unless what you're saying is that the reason that inflation is going to continue to come down is because we're going to see positive productivity trends, positive supply shocks."

Earlier the yen had slumped to 151.82, a fresh four-month low against the dollar just hours before the Fed concluded a two-day policy meeting that came after the Bank of Japan (BOJ) on Tuesday raised interest rates for the first time in 17 years.

Analysts said the yield differential between U.S. Treasuries and Japanese government bonds remained wide and would keep pressure on the yen as it trades near a multi-decade low of 151.94 to the dollar hit in October 2022.

The yield on benchmark 10-year Treasury notes fell 2.1 basis points to 4.275%.

The euro rose 0.51% to $1.092.

Bitcoin was last up 6.4% at $65,860.00.

Reuters