China Holds Loan Prime Rates Steady for 14th Month as Economic Recovery Remains Uneven 
Singapore Says One-Third of U.S. Exports Hit by New 12.5% Tariff 
Fed Holds Interest Rates Steady as Kevin Warsh Says Rising Treasury Yields Tighten Financial Conditions 
US Job Growth Seen Picking Up in July 
Gold Prices Surge 7% as Dollar Falls, Fed Rate Hike Bets Ease 
Asian Stocks Mixed as Chip Selloff Hits KOSPI, Nikkei Ahead of US Jobs Data 
Japan Services Producer Prices Rise 3.2% in June, Supporting BOJ Rate Hike Expectations 
Brazil Cuts Selic Rate to 14% as Inflation Eases but Risks Persist 
BOJ Seen Holding Rates at 1% While Keeping Inflation Risk Warning 
Oil Prices Set for Steep Weekly Losses as Hormuz Deal Stalls 
Eurozone Bond Yields Fall as Oil Slump Eases Inflation Fears Ahead of Central Bank Meetings 
Japan PM Sanae Takaichi Unveils Growth Plan as BOJ Independence Concerns Lift Bond Yields 
Federal Reserve Chair Kevin Warsh unveiled sweeping plans to review key central bank practices on Wednesday while signaling an end to forward guidance, marking what he described as a “new chapter” for U.S. monetary policy. Despite the significant policy shift, investors focused primarily on the Federal Open Market Committee’s (FOMC) more hawkish interest rate outlook.
The FOMC unanimously voted to keep the federal funds rate unchanged at 3.50%-3.75%, in line with market expectations. However, the updated Summary of Economic Projections (SEP), commonly known as the dot plot, projected the benchmark rate at 3.8% by the end of 2026, up from 3.4% in March. The revised forecast suggests one additional 25-basis-point rate hike.
Financial markets reacted negatively to the more aggressive rate outlook. The S&P 500 fell 1.2%, marking its worst performance on the first policy decision day under a new Fed chair. Treasury yields surged as investors sold government bonds, with the 2-year Treasury yield jumping nearly 17 basis points to 4.212% and the 10-year yield rising to 4.492%. The U.S. dollar also strengthened.
Market concerns were amplified by persistent inflation pressures and uncertainty surrounding global energy markets. Analysts noted that elevated oil prices linked to tensions in the Middle East continue to pose inflation risks, making near-term rate cuts increasingly difficult to justify.
Warsh also introduced five new Federal Reserve task forces focused on communications, balance sheet policy, data usage, productivity and employment trends, and inflation frameworks. While the Fed’s 2% inflation target will remain unchanged, the reviews could lead to major changes in how the central bank communicates policy decisions and evaluates economic conditions.
The Fed’s latest policy statement was significantly shorter than previous versions, emphasizing economic growth, labor market stability, and elevated inflation. Warsh said the streamlined approach is intended to provide markets with facts rather than policy guidance.
According to Warsh, reducing reliance on forward guidance should encourage investors to focus more on economic data and less on predicting Federal Reserve actions. He acknowledged that markets may experience short-term volatility as they adapt to the central bank’s new approach but stressed that maintaining price stability remains the Fed’s top priority.
