NEW YORK, Feb 25 — The dollar held a seven-week peak yesterday, as another round of data showing still-high inflation reinforced expectations that interest rates could stay higher for longer.
Moreover, sales of new US single-family homes increased 7.2 per cent in January, the highest level since March 2022. December’s sales pace was revised higher to 625,000 units from the previously reported 616,000. Fed funds futures traders are now pricing the Fed funds rate to hit a peak of 5.395 per centin September, and expect it to stay above 5 per cent for the year, compared with the current target rate of 4.5-4.75 per cent. The markets have also priced in rate hikes over the next three meetings.
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