#fomc

With Kevin Warsh officially at the helm as Federal Reserve Chair and the FOMC meeting now, traders and investors are once again asking: What happens to the stock market after a new Fed Chair takes office?

Warsh’s tenure begun with mixed market reaction as the Iran War dominated headlines. The S&P 500 gained 1.80% during his first week, slipped modestly over the subsequent week, but as of the close on June 15 was up 1.46%. Such early volatility is not unusual. Historical results show that the first few weeks after a leadership transition at the Fed have often provided little indication of the market's longer-term direction.

Historical data in the accompanying updated table provides perspective. Since 1930, the S&P 500 has posted positive returns one year after a new Fed Chair's appointment, 75% of the time, with an average gain of 5.4%. Excluding the extraordinary circumstances surrounding Eugene Meyer’s appointment during the Great Depression and Alan Greenspan’s arrival just before the 1987 crash, the results become even more compelling. Under those adjusted figures, the S&P 500 was higher 90% of the time one year later, with an average gain of 12.7%.

The more important factor may be the outlook for monetary policy.

Investors entered 2026 expecting several rate cuts. However, inflation has proven more persistent than many anticipated, with recent CPI readings remaining above the Federal Reserve's long-term target. As a result, futures markets and many economists have dramatically scaled back expectations for rate reductions this year. Several major forecasts now anticipate that the Fed could leave rates unchanged through the remainder of 2026, while some market participants are even assigning a modest probability to an additional rate hike if inflation remains stubbornly high.

For equities, this creates both a challenge and an opportunity. Higher-for-longer interest rates can pressure valuations, particularly in interest-rate-sensitive sectors. Yet history suggests that markets often perform well following Fed leadership transitions, especially when economic growth remains positive (it is) and corporate earnings continue to expand (they are).

The Federal Reserve  meeting goes to be the spotlight of the day and week, marking the closing possibility for some FX volatility earlier than the summer time season fluffy kicks in. With today’s call unlikely to chuck up any surprises in phrases of policy, the main focus goes to be at the dot plot projections moreover due to the Fed’s statement, in addition to Powell’s presser.

“With inflation running persistently below this longer-run goal, the Committee can aim to attain inflation moderately on top of two % for a few time so inflation averages two % over time and longer‑term inflation expectations stay well-anchored at two %.

Heading towards the  meeting, pre-FOMC positioning has seen the USD go with the flow higher, while the 10yr yield driven off the lows (1.42%) in the direction of 1.50%. In turn, this could recommend that the market square measure is slightly located for a hawkish surprise.

There is a pretty strong consensus forming that the Fed is going to increase the pace of the taper at their next meeting. But they haven’t so much agreed on how much that increase will be.

The American Treasury market is setting out to show signs of liquidity strain because the Fed cuts back on buying. Specifically, the Fed is tapering within the least-sought once bonds, creating liquidity therein section even tighter.

Since the last FOMC meeting, inflation has been up to five with the core figure at 3.8%. However,taking a closer look at the details , the top side in inflation has mostly stemmed from factors like used cars, which is probably going to hearten the Fed’s read that inflation is transient.

The FOMC meeting minutes gives investors a precursor to interest rates decisions by the U.S. Federal reserve and has become one of the most awaited event risks on the data calendar for U.S. Dollar and its related pairs.

The news spurred risk aversion prior to the America FRS financial policy call on Wednesday.

Since the depths of the pandemic, the Fed has been buying U.S. Treasuries and agency mortgage-backed securities in the open to signal its commitment to easy money policies.

Lisa Cook, who was appointed in 2022, is being accused of mortgage fraud. She listed three different properties as primary residences on forms submitted during the vetting process in 2022. This is… not mortgage fraud. Please share your support for her!

2:30 PM EST!