Global Macro Digest

Fed Policy and Inflation Trends

• 🔥 Sticky PCE Data: May headline PCE reached 4.1% and core PCE 3.41% year-over-year, with nine of 18 FOMC...

The Fed's tone has flipped sharply under Chair Warsh. Months ago markets priced cuts; now nine of 18 officials project 2026 hikes, six expecting two,...

Is the Great Debasement Trade over?

• Hawkish Fed dominance: Core PCE at 3.4% and upward GDP revision reinforced 90% odds of a 2026 hike, with Warsh...

Bank of Canada’s June 10 decision to hold the policy rate at 2.25% reflected a clear policy bind.

• Economy below potential: Q1 GDP contracted 0.1%...

Monetary Policy Developments

• 🔥 Fed Hawkish Hold: Fed held rates at 3.5-3.75% with dot plot showing nine officials projecting a hike by year-end...

• Oil prices stabilize after sharp declines, with WTI at $76.79 and Brent at $79.55, pressured by a US-Iran interim deal that could reopen the Strait...

• Hawkish pivot: New Fed Chair Warsh's first FOMC held rates at 3.50-3.75% but lifted the 2026 dot median to 3.8%, penciling in a possible hike and...

• Euro routed: EUR/USD plunged nearly 60 pips to near 1.1500 after the Fed's June decision and revised 2026 dot plot
• Inflation pivot: Median 2026...

The Fed's first meeting under new Chair Kevin Warsh delivered a unanimous hold at 3.5-3.75%, as expected, but projections revealed a clear hawkish...

BOJ hiked its policy rate to 1% on June 16—the highest since 1995—driven by energy-linked inflation risks, with two-thirds of economists in a Reuters...

Fed projections show interest rates staying elevated with inflation above 2% until 2028.

• Nearly every FOMC participant forecasts higher inflation,...

Softer-than-expected UK inflation adds uncertainty to the Bank of England's rate path, with rates widely expected to hold at 3.75% .

Analysts expect inflation across the US and Europe to stay elevated into early 2027 before moderating, providing only temporary support to gold's hedge role amid oil-driven price shocks.

• Former Fed officials flag sticky inflation and energy shocks as reasons for potential rate hikes this year, overriding cut expectations.
• Gold...

ECB Monetary Tightening

• 🔥 First Rate Hike Since 2023: The ECB raised its benchmark rate by 25 basis points to 2.25% in response to...

Gold's sharp rebound from the $4,200 area signals a potential contrarian opportunity after an overdone selloff driven by rate expectations.

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The U.S. dollar slid after President Trump said a peace deal with Iran had been reached and could be signed soon, easing geopolitical risk premia in FX markets.

• Inflation priority rises: Tariffs and Iran-driven oil shocks threaten persistent price pressures above the 2% target, with Warsh's assessment key to...

The ECB raised its deposit rate 25bp to 2.25% on June 11, its first tightening move since 2023, directly targeting energy-driven inflation now at 3.2%...

• Fed hike odds fell from ~75% to 50% as inflation and energy pressures eased
• May headline inflation rose with energy costs, while core remained...