The Indian rupee opened 13 paise weaker at 94.66 against the US dollar on Thursday, 18 June, after the US Federal Reserve delivered a hawkish surprise, strengthening expectations of a possible interest rate hike later this year.
At its latest policy meeting, Fed officials adopted a more aggressive stance than markets had anticipated, with 9 of 18 policymakers projecting at least 1 rate increase in 2026. This was significantly higher than market expectations, with Goldman Sachs previously estimating that only around three members would signal the need for further tightening.
According to a Reuters report, Goldman Sachs also highlighted concerns around the Fed’s inflation outlook. The central bank’s median forecast for core PCE inflation in 2027 was revised to 2.5%, above the investment bank’s estimate of 2.3%, suggesting inflationary pressures may remain persistent.
The Fed’s updated projections have increased the likelihood of further policy tightening later this year. However, Goldman Sachs maintained its base-case expectation that the US central bank will keep interest rates unchanged through the remainder of the year, despite the more hawkish tone.
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