The Federal Reserve gathered in Washington last week for its latest policy meeting, marking Kevin Warsh’s first as Chair. As widely expected, the Fed held rates unchanged at 3.75–4.00%, with attention instead focused on the tone of the post‑meeting press conference and updated Summary of Economic Projections, both of which were interpreted as relatively hawkish¹. The projections signalled that further modest tightening remains possible, with around half of policymakers indicating at least one additional rate hike before the end of 2026. Notably, Warsh suggested that forward guidance has lost relevance in the current environment, prompting speculation that the closely watched “Fed dot plot” may eventually be phased out. Markets reacted cautiously in the immediate aftermath, though losses were partially retraced². The S&P 500 ultimately rose +0.9% over the week (in dollar terms), reflecting a degree of resilience despite a more uncertain policy outlook. Treasury yields meanwhile, were largely unchanged.

Elsewhere, equity markets also delivered a broadly constructive performance. Japanese equities were particularly strong, with the Nikkei 225 surging +7.9% (in yen terms) to extend its advance into record territory. Gains were once again led by the technology sector, with semiconductor names benefiting from sustained optimism around AI‑related capital spending and demand visibility. Mainland Chinese equities also moved higher in what was a holiday‑shortened week, with the Shanghai Composite supported by firmer industrial production data, reinforcing signs of stabilisation in the manufacturing backdrop. In Europe, the MSCI Europe ex‑UK index rose +1.1% (in euros), aided in part by a more optimistic geopolitical backdrop following the signing of a memorandum of understanding between the US and Iran. By contrast, UK equities underperformed, with the FTSE 100 and FTSE 250 falling -1.0% and -0.5% respectively, despite an inflation print that came in below expectations.

Turning to commodities, price action was notably weaker over the week as geopolitical developments shifted sentiment. Brent crude fell -7.9% to $80 a barrel, coming under sustained pressure as traders focused on the evolving details of the US‑Iran agreement. The gradual resumption of shipping through the Strait of Hormuz helped ease immediate supply concerns, though a full normalisation is likely to take time. Gold also moved lower, declining -1.5% to $4,151 an ounce and marking a third consecutive weekly loss. The weakness reflects a more hawkish repricing of Federal Reserve policy expectations, alongside a firmer US dollar, both of which have weighed on demand for non‑yielding assets.

¹ Federal Reserve – FOMC Press Release, 17/06/2026
² T  Rowe Price – Global Markets Weekly Update, 19/06/2026

SJP Approved: 22/06/2026

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