Economy

The US Federal Reserve has held its benchmark federal funds rate unchanged at 3.50%–3.75% for three consecutive FOMC meetings, reflecting persistent inflation pressures — partly driven by rising energy costs from the Middle East conflict — and a resilient labour market. Markets are watching the June 16–17 FOMC meeting closely for any signals from new Fed Chair Kevin Warsh on the future rate path.

The Bank of Japan is widely expected to raise its short-term policy rate from 0.75% to 1% at its June 15–16 policy meeting, with markets pricing in an 80% probability. Governor Kazuo Ueda has acknowledged that surging crude oil prices — linked to the ongoing Middle East conflict — are pushing Japan's core inflation toward 2.5%–3.0% in fiscal 2026, well above the central bank's 2% target and creating what analysts describe as a light stagflation scenario.