Finance

In his first meeting as Chairman, Kevin Warsh led the Federal Reserve in keeping interest rates steady at 3.50-3.75%. Despite the pause, officials released a hawkish dot plot showing that nearly half of the committee anticipates at least one rate hike before the end of 2026 due to persistent inflation. Warsh also scrapped traditional forward guidance, emphasizing that future decisions will be made on a strictly data-dependent basis.

Crude oil prices continued a sharp decline, with Brent crude falling below $79 per barrel following the de-escalation of tensions in the Middle East. The U.S.-Iran ceasefire agreement has already sent global prices down more than 9% this week, significantly easing inflationary pressure at the pump for U.S. consumers as national gasoline averages dipped below $4 per gallon.

The U.S. Treasury market experienced a notable flattening of the yield curve, with 2-year yields spiking to their highest levels since February 2025 following the Fed's hawkish projections. While short-term rates rose to reflect potential upcoming hikes, longer-term yields remained more stable or declined slightly, signaling investor selectivity and concerns about long-duration economic growth.