Federal Reserve Chair Kevin Warsh's press conference appears on screens on the floor of the New York Stock Exchange, Wednesday, Jun 17, 2026. (Photo: AP/Richard Drew)
18 Jun 2026 05:40AM
NEW YORK: Wall Street stocks finished decisively lower Wednesday (Jun 17) while the dollar rallied after the Federal Reserve raised its inflation forecast and projected an interest rate hike by year-end.
The US central bank, as expected, kept interest rates unchanged as newly-installed Fed Chairman Kevin Warsh announced plans to broadly review Fed monetary policy protocols with an eye towards updating the institution.
Warsh was appointed by US President Donald Trump, who had lambasted former Fed chair Jerome Powell over his reluctance to cut interest rates.
But Warsh's appointment has coincided with a jump in prices. US inflation came in at a three-year high in April, as Trump's war on Iran has caused energy prices to surge, with knock-on effects on a range of sectors in the world's largest economy.
At Wednesday's press conference, Warsh vowed the central bank would "deliver price stability" as the Fed raised year-end PCE inflation expectations to 3.6 per cent from 2.7 per cent in March.
The statement was accompanied by projections signaling that Fed policy makers expect one interest rate hike by the end of 2026.
Art Hogan of B. Riley Wealth Management described the chart showing the projections as "more hawkish" than expected, noting that Warsh's press conference was dominated by questions about inflation with much less focus on the Fed's other mandate of achieving full employment.
The meeting's tone reflects "that employment is not a concern at the moment, while inflation is," said Angelo Kourkafas from Edward Jones. "The bar for rate hikes, which was thought to be very high, is not as high anymore."
Futures markets showed a significant shift in bets towards interest rate hikes, with more than 60 per cent eyeing higher interest rates at the Fed's September meeting compared with less than 30 per cent prior to Wednesday's decision.
The dollar, meanwhile, advanced against the euro and other major currencies, while yields on 10-year US Treasury bonds pushed higher.
Earlier, oil prices finished modestly higher as markets anticipated the signing of a peace accord between Washington and Tehran expected to reopen the Strait of Hormuz.
The United States on Wednesday released the text of the agreement with Iran , under which officials said Tehran would agree to dilute its enriched uranium stockpile under UN supervision, which one official described as a "major, major win."
Iran has repeatedly insisted, including on Wednesday, that nuclear issues would only be discussed in subsequent talks after the initial deal is signed.
Oil industry experts and shipping companies have warned that it will take time to restore normal operations after the waterway's near shutdown.
"Investors also want clarity concerning the Strait of Hormuz, and if shipping will be forced to pay a 'fee' to Tehran, ostensibly for an escort to ensure a safe transit," said market analyst David Morrison at Trade Nation.
Crude inventories held by OECD member countries fell in May to the lowest level since 1990 as governments drew down stocks to offset the blockage of Gulf crude shipments during the Middle East war, the International Energy Agency said Wednesday.
Read the full article at Channel NewsAsia (CNA) →📄Source document: Interview with Makoto Sakurai
3 reports
Channel NewsAsia (CNA)Party-alignedCenter2 days agoFormer Bank of Japan (BOJ) policymaker Makoto Sakurai stated that the BOJ may raise interest rates twice by the end of the current fiscal year, signaling a shift in focus toward managing inflation risks. Sakurai noted that the BOJ's recent rate increase to 1% reflects growing concerns about inflation surpassing its 2% target. He suggested that another rate hike is likely by year-end, possibly in October or December, depending on inflation trends during the July-September period.
Bias read (Center): The article presents a neutral summary of statements made by a former BOJ policymaker regarding potential interest rate increases. It does not exhibit biased language, one-sided sourcing, or editorializing. The content focuses on economic forecasting and policy discussion without taking a stance on褒
Official sources cited
- press release Interview with Makoto Sakurai
Channel NewsAsia (CNA)Party-alignedCenter3 days ago US stocks fall, dollar rallies as Fed raises inflation forecastUS stocks fell and the dollar rose following the Federal Reserve's decision to raise its inflation forecast and signal a potential interest rate increase by year-end. The Fed, under new chairman Kevin Warsh, maintained current interest rates but indicated a broader review of monetary policy. Inflation reached a three-year high in April, partly due to rising energy prices linked to tensions involving Iran. Warsh emphasized the Fed's commitment to achieving price stability.
Bias read (Center): The article presents factual economic developments without overtly favoring any political side. It includes context about the Fed’s actions, inflation data, and mentions political figures like Donald Trump and Kevin Warsh neutrally. There is no clear ideological framing or biased language.
Official sources cited
- government Federal Reserve
- organisation B. Riley Wealth Management
Channel NewsAsia (CNA)Party-alignedCenter4 days ago US Federal Reserve holds rates steady, raises inflation expectationsThe US Federal Reserve held interest rates steady at 3.50 to 3.75 per cent for the fourth consecutive meeting, citing ongoing inflation pressures due to global conflicts and supply shocks. The Fed raised its year-end inflation expectations to 3.6 per cent, projecting a potential rate hike by the end of 2026. Policymakers noted that economic activity is expanding but faces challenges from uncertainties linked to the Middle East conflict.
Bias read (Center): The article presents factual information about the Federal Reserve's decision without overtly favoring any particular political perspective. It includes direct quotes from the Fed and provides context regarding inflation and economic conditions without apparent bias or loaded language.
Official sources cited
- organisation Summary of Economic Projections
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