Finance

Federal Reserve Chairman Kevin Warsh indicated that while inflationary risks have moderated, the central bank remains non-committal regarding an interest rate hike for the July meeting. Market expectations for a near-term increase dipped following his comments, which suggested that increased business investment in artificial intelligence could expand economic capacity and influence future policy.

U.S. Treasury yields rose on Wednesday, with the benchmark 10-year note settling near 4.47% as investors reacted to expanding factory activity data. Despite the climb, yields pared some gains later in the session after a weaker-than-expected manufacturing report suggested the Fed might not need to be as aggressive with future rate increases.

Oil prices continued their downward trend on July 1, with Brent crude slipping below $72 a barrel as tensions between the U.S. and Iran appeared to stabilize. This decline follows the worst quarterly performance for oil since the pandemic, driven by the reopening of the Strait of Hormuz and a general de-escalation in Middle Eastern conflicts.