The Week That Was and The Week That Is to Come
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The Week That Was: Rates Held, Missiles Launched
Last week saw markets navigate a treacherous blend of monetary caution and geopolitical escalation.
On Wednesday, the Federal Reserve held interest rates steady, as expected. What was less expected was the intensity of concern voiced by Chair Powell and several Fed governors about the inflationary implications of the new tariff regime. While CPI (Consumer Price Index) and PCE (Personal Consumption Expenditures) trends have moderated, the potential second-order effects of broad-based import taxes have given t
That ambiguity is keeping the Fed sidelined—for now.
However, Governor Christopher Waller, often a bellwether for future shifts, indicated that a July cut remains on the table. His remarks, while hedged, suggested confidence that inflationary pressures may soon be contained enough to justify accommodation. Waller was among the first to advocate for rate hikes in early 2022, so his positioning is worth watching.
Meanwhile, markets were blindsided this weekend by a massive geopolitical development, President Trump ordered a U.S. bombing run on three nuclear sites in Iran. The strikes came amid escalating Israel-Iran hostilities and signal a willingness by the U.S. to take direct military action albeit from the air. Trump has maintained that he has “no intention of sending ground troops”, but whether that’s a tenable stance remains to be seen.
Early reporting suggests Iran had removed key materials and equipment from the targeted nuclear facilities prior to the attack. Whether this was the result of intelligence leaks, precautionary repositioning, or luck is unknown, but it does call into question the strategic effectiveness of the strike.
Markets closed Friday with a risk-off tone, and futures opened this week with a spike in oil prices, driven by fears of regional supply disruption. Expect volatility.
The Week That Is to Come: Bracing for Impact
The week ahead will be dominated by geopolitical fallout and central bank posturing. Here's what's on deck:
Market-Moving Events:
Monday–Tuesday
Markets digest the Iran strike. Look for energy sector moves, especially WTI and Brent, and defense stocks that may benefit from elevated tensions.
Tuesday, June 25
Durable Goods Orders (May) at 8:30 a.m. ET
Richmond Fed Manufacturing Index at 10:00 a.m. ET
Wednesday, June 26
Fed Governor Cook speaks at a Bloomberg panel (10:30 a.m. ET).
Thursday, June 27:
Final Q1 GDP revision (8:30 a.m. ET)
Initial Jobless Claims
Friday, June 28:
PCE Price Index (May) – The big one. Core PCE is still the Fed’s preferred gauge.
University of Michigan Consumer Sentiment (final)
What We’re Watching
Tariff passthrough: Retail and industrial earnings transcripts will be closely parsed for margin compression or pricing power.
Fed tone-shifting: If more governors join Waller in supporting a July pivot, equities could rally—even in the face of geopolitical stress.
Oil spike consequences: $90+ oil would reintroduce headline inflation risk and further complicate the Fed’s calculus.
Iran response: Retaliation from Tehran could trigger a larger regional conflict. Markets have not priced this in yet.
The Big Picture
This week’s confluence of geopolitical risks and economic data creates a high-stakes environment for markets. The Iran strike could keep energy prices and defense stocks volatile, while economic indicators will test the narrative of a slowing U.S. economy. Central bank rhetoric, especially from Fed Governor Cook, will either reinforce or challenge current rate cut expectations, with Friday’s PCE and sentiment data as the ultimate arbiters. Investors should brace for swings as markets navigate this complex landscape energy volatility, inflation signals, and Fed posturing will dictate the tone.
