The dollar tumbled the most in six years after the Federal Reserve slashed projections for U.S. interest rates, tempering the removal of a promise to remain “patient” on raising borrowing costs.

The greenback weakened versus most major peers as central bank officials almost halved their median estimate for the target rate this year. The dollar has been on a tear for the last six months, with traders boosting bets for further appreciation to a record high, as the Fed moves closer to tightening for the first time in almost a decade.

“The big story here really is the fed funds rate projections being cut,” said Lennon Sweeting, a Toronto-based dealer at the broker and payment provider USForex Inc. “It makes clear the Fed’s stance that they’ll be slow and cautious. There’s no real urgency for them to raise rates.”

The Bloomberg Dollar Spot Index, a gauge of the currency’s performance against 10 major peers, slumped 1.75 percent to 1,194.89, the most since the Fed announced bond purchases in March 2009. On Friday, the index reached the highest level based on closing prices going back to 2004.

The dollar depreciated 1 percent to 120.11 yen and lost 2.5 percent to $1.0864 per euro.

Dot Plot

Policy makers’ estimates for the federal funds rate at the end of 2015 dropped to 0.625 percent, compared with 1.125 percent in December forecasts. The outlook for 2016 was cut to 1.875 percent from 2.5 percent, according to the Federal Open Market Committee’s quarterly Summary of Economic Projections.

Changes in the assessment of the economy are behind the reduced projections, including lower expectations for inflation, Fed Chair Janet Yellen said at a press briefing in Washington on Wednesday. While the strong dollar has weighed on consumer prices, contributing to weak export growth and low import prices, it also reflects strength in the U.S. economy, she said.

The Fed’s move toward higher borrowing costs contrasts with a backdrop of central-bank easing from the euro area to Australia, with Sweden’s Riksbank lowering its key interest rate Wednesday. That divergence in monetary policy has fueled flows into U.S. assets, boosting the dollar to multi-year highs.

The dollar has rallied 5.9 percent this year, making it the second-best performer after the Swiss franc among 10 developed- market currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen has gained 5.5 percent, while the euro dropped 6 percent, the group’s worst performer.

Rate Timing

“Just because we removed the word ‘patient’ from the statement doesn’t mean we’re going to be impatient” to raise rates, she said, adding that while a rate increase in April is “unlikely,” June shouldn’t be ruled out.

Futures contracts show a 38 percent likelihood that the Fed will raise rates by its September meeting, down from a 53 percent chance seen prior to the statement.

Almost 90 percent of economists surveyed by Bloomberg predicted officials would drop the “patient” pledge from their statement. Some 45 percent saw this as a step toward a June increase in rates, while 37 percent saw rate liftoff in September, according to the poll of 49 respondents conducted March 12 and 13.

“I’m surprised the U.S. dollar has come off so much following this,” Matt Derr, a foreign-exchange strategist at Credit Suisse Group AG in New York, said by e-mail after the Fed’s statement. “A June hike is still on the table.”