Bank of America Global Research reviews the September FOMC decision.

'The Fed sent a strongly hawkish message at its September meeting. The statement removed the language around inflation being partly due to supply shocks. I.e., no more excuses. The SEP showed stronger growth, higher inflation and a lower u-rate across the forecast horizon, despite two hikes this year. And Chair Warsh made it clear in his presser that the job isn't done. He repeatedly emphasized the strength of the economy and noted that the Fed's job is to prevent commodity shocks from broadening out. We remain comfortable with our call for two more 25bp hikes this year, in October and December," BofA notes.

"Overall, the DXY still remains about 1% below levels just ahead of June FOMC.  September's FOMC, along with the recent trend of solid US data better opens the upper side of the dollar's distribution and should quiet calls for a return to the "debasement trade". We generally see the dollar ending the year at/around current levels vs. most G10 currencies," BofA adds.