The Federal Reserve may have left interest rates unchanged this week, but financial markets were left with more questions than answers.
At his first press conference as Fed Chair, Kevin Warsh avoided providing any clear guidance on the next policy move. Instead, he emphasized that inflation remains above the Fed’s 2% target and reaffirmed the central bank’s commitment to restoring price stability.
At the same time, the Fed’s updated projections turned more hawkish. Roughly half of FOMC members now expect at least one rate hike in 2026, while inflation forecasts were revised higher.
The result was an immediate repricing across financial markets. The US dollar strengthened, Treasury yields moved higher, while equities, gold and cryptocurrencies came under pressure.
Adding another layer to the story, the US-Iran interim peace agreement officially came into effect. The reopening of the Strait of Hormuz triggered a sharp decline in oil prices, easing fears of a prolonged energy-driven inflation shock.
Our focus this week will be on Alpari's USDInd as traders continue to assess whether the Fed’s hawkish shift or falling energy prices will prove to be the dominant market driver.
Fed fallout, inflation signals and global growth data
Markets enter the new week still digesting the implications of the June FOMC meeting and Kevin Warsh’s first appearance as Fed Chair. Attention will now shift toward incoming economic data that could either support or challenge the Fed’s more hawkish stance.
Monday, June 22nd: Germany and Eurozone Flash PMIs
Business activity surveys will provide an early indication of economic momentum across Europe and may influence sentiment toward the euro.
Tuesday, June 23rd: UK Flash PMIs
The latest UK business activity data will be closely watched after softer inflation figures and the Bank of England's decision to keep rates unchanged.
Wednesday, June 24th: Germany Ifo Business Climate
Germany’s key business sentiment survey may offer further clues about the outlook for Europe’s largest economy.
Wednesday, June 24th: Fed Bank Stress Test Results
Investors will monitor the annual Federal Reserve stress tests for signs of strength or weakness within the US banking sector.
Thursday, June 25th: US Final Q1 GDP
The final estimate of first-quarter economic growth will help assess whether the US economy remains resilient despite tighter financial conditions.
Thursday, June 25th: US Core PCE and Personal Spending
The Fed’s preferred inflation gauge remains the most important data release of the week. Stronger inflation or consumer spending figures could reinforce expectations that rates will stay elevated for longer.
Thursday, June 25th: Australia Employment Report
Labour market data may influence expectations for future Reserve Bank of Australia policy decisions and drive volatility in the Australian dollar.
Friday, June 26th: Markets Continue to Assess the Impact of the US-Iran Deal
Investors will remain focused on energy markets, shipping activity through the Strait of Hormuz and whether lower oil prices begin to influence inflation expectations globally.