The Fed held rates steady but its updated Summary of Economic Projections (dot plot) shifted to signal one more hike this year, catching markets that had been pricing in cuts. The dollar index surged as real yields repriced higher, with the move reinforcing the 'higher for longer' policy stance heading into the back half of the year.

The second-order setup is in rate-sensitive FX pairs and risk assets: EUR/USD, GBP/USD, and EM currencies face renewed headwinds, while gold and long-duration bonds are under pressure. Watch whether incoming CPI and labor data validate the hawkish dot or give the Fed room to stand pat — that data flow will determine whether this dollar move has legs or reverses sharply.