Daily Newsletter 6/16/25

Futures are trading higher this morning, reflecting a more optimistic market tone compared to the bearish sentiment observed on Friday in response to the Israel-Iran conflict. The duration of this positive momentum will largely depend on how the situation between the two countries unfolds in the coming days. Oil prices have already experienced significant volatility as a direct consequence of the escalating tensions.

The next Federal Open Market Committee (FOMC) meeting is scheduled for June 17–18, 2025. The committee will announce its interest rate decision and release updated economic projections at 2:00 p.m. EST on June 18.

The FOMC’s rate decision and forward guidance will be a major catalyst for market direction. Any surprises in the Fed’s tone or projections could trigger significant moves across equities, bonds, currencies, and commodities, as investors recalibrate expectations for monetary policy in the second half of 2025.

We expect, in line with market consensus, that the Federal Reserve will cut rates twice once the economic outlook becomes clearer—likely after the temporary inflation from recent tariffs fades and growth slows, leading to easing inflation pressures.