The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

0628 GMT - The dollar eases slightly but remains elevated after reaching a one-and-a-half-month high overnight following the Federal Reserve's unanimous decision to raise interest rates by 25 basis points, as anticipated. Fed officials pencilled in at least one more rate rise this year while Chairman Kevin Warsh said inflation is too high and has been for too long. President Trump once again called for lower rates following the decision. "The greatest danger for the dollar lies in the president increasing pressure on the Fed again in the coming weeks, which could lead to renewed doubts about the Fed's independence," Commerzbank's Michael Pfister says in a note. The DXY dollar index trades falls 0.1% to 100.192 after reaching 100.367 overnight. (renae.dyer@wsj.com)

0621 GMT - UBS thinks the Fed will undertake another 25bp rate hike at the December FOMC meeting, says economist Jonathan Pingle. The FOMC is likely to pass on raising rates at the October meeting, just as the Fed waited and evaluated events in June and July, he says. That would avoid raising interest rates six days before the U.S. midterm elections, he adds. UBS forecasts the Fed to hold in 2027 and lower rates at the June 2027 meeting. "We might be staring at a much more hawkish FOMC reaction function for the next four years compared to the last forty," Pingle says. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

0603 GMT - Federal Reserve Chairman Kevin Warsh's tone was "on the hawkish side," Jefferies's Mohit Kumar says in a note. He refers to Warsh's comments that financial conditions can hardly be described as restrictive, and that the interest-rate hike removed a dose of accommodation, suggesting that more increases are to come, the global economist says. Warsh didn't provide any forward guidance, "but the focus was on credibility and that the Fed would act to make sure that inflation is reaching back toward their goal," Kumar says. (emese.bartha@wsj.com)

0557 GMT - The Federal Reserve has finally begun its hiking cycle, and the debate now shifts from whether rates will rise again to how many hikes lie ahead, Principal Asset Management's Seema Shah says in a note. "The unanimous vote shows that rising energy prices and stubborn inflation have brought even the doves on board, making a one-and-done move highly unlikely," the chief global strategist says. With markets already pricing multiple increases, policymakers will probably need to deliver at least one more hike to safeguard credibility, she says. "Moreover, with inflation not projected to return to target until 2029 under the current path, the case for further tightening in 2027 remains compelling." (emese.bartha@wsj.com)

0552 GMT - The Federal Reserve had no choice but to give the market a hike or risk a much bigger bond market selloff, which is shown in the 12-0 vote, Laffer Tengler Investments' Byron Anderson says in a note. "The Fed is trying to calm the bond market rather than signaling a hiking cycle," the head of fixed income says. The market narrative is on a collision course with the Fed from here on out, which means more volatility, he says. (emese.bartha@wsj.com)

0547 GMT - A unanimous decision by the Federal Reserve to raise rates, and the suggestion of an additional hike later this year, will help remove some uncertainty for the market, Catalyst Funds' Larry Holzenthaler says, adding that it is a positive. "It's fair to assume that if the Fed had not acted today [Wednesday], it would have caused meaningful strain across markets," the senior portfolio manager says. This rate hike--and suggestion of more to come--should keep the demand for low-duration credit fairly high, in particular senior corporate loans, which have a floating rate coupon structure, and the same can be said for higher-yielding, shorter-duration bonds as well, he says. (emese.bartha@wsj.com)

0541 GMT - The Federal Reserve's decision to raise rates doesn't necessarily mark the start of a sustained upward momentum in the dollar, DBS's Philip Wee writes. "This is not the U.S.-led hiking cycle in 2022," says the foreign-exchange strategist. The Fed is catching up with major central banks in responding to inflation risks and preventing energy price shocks from generating second- and third-order effects across the economy, he notes. The Treasury market also remains a key drag on confidence, with yields staying firm on 10-year and 30-year Treasurys, suggesting that the struggle over long-term borrowing costs is unresolved, Wee adds. DBS sees the DXY dollar index remaining in the 96-102 range established since mid-2025. The DXY is flat at 100.278. (farah.elias@wsj.com)

0538 GMT - U.S. Treasury yields are little changed in Asian trade, absorbing the Federal Reserve's 25-basis-point interest-rate hike Wednesday and the prospect of more tightening to come. "Despite the hike, there is potential for some relief from investors now that the Fed has caught up with the market in terms of rate projections," says Stephen Coltman, head of macro at 21shares, in a note. "The FOMC is officially forecasting one more rate hike this year, in line with current market pricing," he says. This suggests the risks for investors going forward around the Fed have now become more two-sided, he says. The two-year Treasury yield falls 0.7 basis point to 4.719%, while the 10-yer yield is flat at 5.003%, according to Tradeweb. (emese.bartha@wsj.com)

0528 GMT - Further interest-rate hikes should clearly be on the Federal Reserve's agenda, Aviva Investors' Ed Hutchings says in a note. With core inflation printing above target for the last five years and short and long-term inflation expectations at uncomfortable levels, the Fed still has a sizeable task at hand, and this is all before the effects of El Nino are known, the head of rates says. "With all this considered, alongside an employment market holding in well and no respite in the Middle East situation, the outlook for the inflation side of the Fed's mandate must remain a significant and primary source of concern," he says. Addressing this must be the priority, he says. (emese.bartha@wsj.com)

0526 GMT - The culprit of the yen's recent depreciation is Japan's relatively weak expansion of strategic investments to promote industrial policies, Credit Agricole says in a note. U.S. data centers and chip-making projects, for instance, have been attracting a great deal of foreign capital and investors. Japan has lagged behind the U.S. and Europe in strategic investments, which is reflected in the Japanese government's smaller fiscal deficit, the French bank says. Thanks to rising tax revenue, the Japanese government has large fiscal room to expand strategic investments, the bank says. The government's intent of expanding investments is likely to become clearer in the process of formulating the next fiscal year's budget, the bank says. (kosaku.narioka@wsj.com; @kosakunarioka)

0522 GMT - U.S. Treasury Secretary Scott Bessent can buy some time with an increased longer-dated bond buyback, but for the bond market's fiscal concerns to ease, actual action has to be taken in Washington, Bernstein Private Wealth Management's Matthew Palazzolo says in a note. Bernstein Private Wealth Management has limited expectations in this regard. "The bond market, though, is much larger and stronger than the Treasury," the senior investment strategist says. Relatedly, it's worth noting that the recent bond moves are not a U.S.-only phenomenon, he says. "So, to anchor the Treasury yield move in large part to our deficit issues is myopic, in our view," Palazzolo says. (emese.bartha@wsj.com)

0516 GMT - The move of the 10-year Treasury yield back to 5% is real, but the cause is narrower than the headlines suggest, Bernstein Private Wealth Management's Matthew Palazzolo says in a note. "In our view, the big driver of the move in Treasurys recently has been the anticipated policy path or, alternatively, the real yield, which have each risen by around 50 basis points this year," the senior investment strategist says. "It tells us that the move is not due to higher inflation expectations since those expectations haven't changed much," he says. He adds that it is also not illuminating concerns about a material inflation shock or other macro/geopolitical shock, as those are accounted for by the term premium, which has also moved sideways of late.