NEW YORK: Wall Street stocks finished decisively lower Wednesday (Jun 17) while the dollar rallied after the Federal Reserve raised its inflation forecast and projected an interest rate hike by year-end.The US central bank, as expected, kept interest rates unchanged as newly-installed Fed Chairman Kevin Warsh announced plans to broadly review Fed monetary policy protocols with an eye towards updating the institution.Warsh was appointed by US President Donald Trump, who had lambasted former Fed chair Jerome Powell over his reluctance to cut interest rates. But Warsh's appointment has coincided with a jump in prices. US inflation came in at a three-year high in April, as Trump's war on Iran has caused energy prices to surge, with knock-on effects on a range of sectors in the world's largest economy.At Wednesday's press conference, Warsh vowed the central bank would "deliver price stability" as the Fed raised year-end PCE inflation expectations to 3.6 per cent from 2.7 per cent in March.The statement was accompanied by projections signaling that Fed policy makers expect one interest rate hike by the end of 2026.Art Hogan of B. Riley Wealth Management described the chart showing the projections as "more hawkish" than expected, noting that Warsh's press conference was dominated by questions about inflation with much less focus on the Fed's other mandate of achieving full employment.The meeting's tone reflects "that employment is not a concern at the moment, while inflation is," said Angelo Kourkafas from Edward Jones. "The bar for rate hikes, which was thought to be very high, is not as high anymore."Futures markets showed a significant shift in bets towards interest rate hikes, with more than 60 per cent eyeing higher interest rates at the Fed's September meeting compared with less than 30 per cent prior to Wednesday's decision.The dollar, meanwhile, advanced against the euro and other major currencies, while yields on 10-year US Treasury bonds pushed higher.