Overview
- The U.S. Federal Reserve in its first meeting under Chair Kevin Warsh kept rates unchanged and announced a restructuring of communications and internal committees to reduce forward guidance.
- The Bank of Japan raised its policy rate to 1.0%, the highest since 1995, and senior officials warned there is a real risk underlying inflation could climb above the 2 percent target, signalling more hikes if consumer prices accelerate.
- Japan’s core consumer price index remained below 2 percent at 1.4 percent in May because government fuel and cost subsidies have muted energy-driven price rises despite rising wholesale costs.
- The Bank of Russia moved in the opposite direction by trimming its key rate to 14.25 percent, citing falling fuel production and budgetary risks as reasons to ease policy cautiously.
- Other major central banks have mostly stayed on hold, and investors are watching oil flows through the Strait of Hormuz, upcoming inflation and wage data, and exchange-rate moves — especially the weak yen and possible market intervention — for signs of the next policy shifts.