Finance

In the first meeting under new Chair Kevin Warsh, the Federal Reserve kept interest rates steady at 3.50% to 3.75% but signaled that at least one rate hike may be necessary before the end of 2026. Policymakers cited persistent inflation, which reached 4.2% in May, and continued strength in the labor market as reasons for a potential further tightening of monetary policy. This hawkish bias contributed to rising U.S. Treasury yields and pushed the U.S. dollar to a one-year high against major currencies.

Oil prices showed signs of stabilization with Brent crude hovering around $80 per barrel as markets reacted to a provisional peace deal between the United States and Iran. The agreement includes the reopening of the Strait of Hormuz, which is expected to ease global supply disruptions and mitigate recent volatility in energy commodities. While energy prices have retreated from earlier highs, they remain elevated compared to 2025 levels due to ongoing geopolitical uncertainties and high global demand.

Bitcoin and Ethereum faced downward pressure, sliding below $63,000 and $1,700 respectively as investors reacted to the Federal Reserve's hawkish outlook. The prospect of sustained higher interest rates and a strengthening U.S. dollar has reduced the appeal of non-yielding digital assets, leading to over $42 million in market liquidations. Additionally, the industry continues to monitor the impact of high mining costs, which have pressured profitability for several months.