By Jesse Cohen
Investing.com - The Federal Reserve remained the key story in financial markets on Thursday, after Chair Jerome Powell struck a more hawkish tone than expected at his press conference, roiling financial markets.
The U.S. central bank cut interest rates for the first time in more than a decade on Wednesday, lowering its Fed funds target range by 25 basis points, citing “global developments” along with “muted inflation.”
However, Powell disappointed investors by saying the widely-anticipated move was a “mid-cycle adjustment to policy” rather than “the beginning of a lengthy cutting cycle”.
At the same time, he said, "I didn't say it's just one rate cut."
In a series of posts on Twitter, President Donald Trump said Powell had “let us down” by not clearly signaling more rate cuts.
Traders still see one more rate cut this year, according to Investing.com's Fed Rate Monitor Tool. Powell's remarks, however, slashed expectations the Fed is prepared to lower rates well into next year.
In currency markets, the dollar enjoyed a broad-based rally in the wake of Powell's relatively hawkish comments on the rate outlook, climbing to levels not seen since May 2017.
The dollar index against a basket of six major currencies was last at 98.67, having touched a more than two-year high of 98.69 earlier.
Against the Japanese yen, the dollar broke above 109 to jump to the highest since the end of May.
The euro fell to $1.1031, the lowest since May 2017.
The British pound was also on the back foot, slumping to a two-and-a-half year low of 1.2085 against the surging dollar.
In the bond market, yields on U.S. Treasuries inched higher as investors scaled back expectations for at least 100 basis points of easing in the near term.
Yields on 10-year bonds climbed to as high as 2.061% from a U.S. close of 2.007%. They were last at 2.039%.
Meanwhile, on Wall Street, U.S. stock futures pointed to a rebound, after suffering their biggest sell-off since May on Wednesday.
At around 6:35AM ET, the blue-chip Dow futures were up 67 points, or 0.25%, the S&P 500 futures tacked on 6 points, or 0.2%, while the tech-heavy Nasdaq 100 futures rose 25 points, or 0.3%.
To see more of Investing.com’s weekly comics, visit: http://www.investing.com/analysis/comics
-- Reuters contributed to this report