This content was published on
June 17, 2026 - 04:24
5 minutes
(Bloomberg) — Bonds advanced ahead of the Federal Reserve’s policy decision, as a sharp recent slide in oil prices helped ease concerns of a renewed inflation shock.Yields on benchmark Australian and Japanese 10-year notes slipped around four basis points while those on similar-maturity Treasuries edged lower to hold near a one-month low. Asian stocks were little changed after a three-day rally while S&P 500 futures rose. That’s after a pullback in semiconductor makers weighed on US equities on Tuesday, sending the Nasdaq 100 down almost 2%.Brent crude traded below $80 a barrel, holding near a three-month low. Prices slumped 15% over the last four sessions in the longest losing run this year on bets the US-Iran deal to reopen the Strait of Hormuz will unleash a wave of supply. The decline has prompted investors to reassess the global interest-rate outlook just as the Fed meets for the first time under Chairman Kevin Warsh.“An actual end to the war and oil flowing freely will bring yields lower in the short term,” said Byron Anderson, head of fixed income at Laffer Tengler Investments, which oversees more than $1.7 billion. “Rate hikes will disappear once energy inflation dissipates.”With a well-flagged hike from the Bank of Japan seen as an exception, most developed-world central banks, including the Fed, are expected to make no changes this week. The bigger focus for investors is what the policy outlook looks like under Warsh. Bloomberg Economics sees a shift in how the Fed communicates with markets as Warsh is unlikely to submit his own “dot” to the closely scrutinized dot plot, breaking with precedent under Jerome Powell, Janet Yellen and Ben Bernanke.“The wild card is going to be whether Warsh goes through with balance sheet reduction and end signaling from the Fed,” said Anderson.Options traders are increasingly divided over the Fed’s near-term rate path, with conflicting bets that span from cuts to various degrees of hikes over the coming months.Policy forecasts from Wall Street strategists also run the gamut. US asset manager PGIM this week said the Fed will raise rates three times this year, while Citigroup Inc.’s Andrew Hollenhorst has said the central bank will cut rates this year. BNP’s recent call is for three rate hikes starting in December.Meanwhile, the US and Iran are preparing to formally sign an interim peace deal that’s left both sides claiming victory, with details of the accord still emerging and leaving many European governments, energy investors and shipping companies with reservations about how fast the Strait of Hormuz can return to pre-war conditions.“The backdrop has actually tilted more dovish over the past 48 hours, with oil falling sharply on Hormuz reopening expectations, providing a real disinflationary impulse,” said Billy Leung, an investment strategist at Global X Management. “But the market won’t get ahead of that until it hears directly from Warsh.”Elsewhere in markets, a gauge of the dollar was little changed, while gold and silver edged higher.Corporate Highlights:SpaceX jumped for a third straight day on Tuesday, overtaking Amazon.com Inc. in value to become the fifth-largest stock in the world. Kuaishou Technology is in discussions with General Atlantic to lead a first round of financing for its video AI arm, seeking to secure a major US backer ahead of an initial public offering. SpaceX formally agreed to take over Cursor in a deal that values the artificial intelligence coding startup at $60 billion, cementing a key part of Elon Musk’s efforts to catch up with rivals on coding tools. US Commerce Secretary Howard Lutnick warned Anthropic PBC in a letter last week that it would need government permission to grant foreign nationals access to its most advanced AI models and threatened criminal and civil penalties if the firm failed to comply, according to a copy obtained by Bloomberg News. Yum! Brands Inc. is selling its struggling Pizza Hut division for $2.7 billion, allowing the restaurant operator to focus on its better-performing KFC and Taco Bell chains. Robinhood Markets Inc. said it’s cutting 10% of its workforce, a reduction of around 300 positions, to “remain lean and disciplined” as it develops new products. South Korean retail investors snapped up almost $800 million of SpaceX shares on the stock’s first day of trading, underscoring strong demand for Elon Musk’s company Some of the main moves in markets:StocksS&P 500 futures rose 0.2% as of 11:21 a.m. Tokyo time Japan’s Topix rose 0.8% Australia’s S&P/ASX 200 rose 0.5% Hong Kong’s Hang Seng fell 0.3% The Shanghai Composite was little changed Euro Stoxx 50 futures fell 0.2% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1614 The Japanese yen was little changed at 160.32 per dollar The offshore yuan was little changed at 6.7563 per dollar CryptocurrenciesBitcoin rose 0.1% to $65,862.51 Ether was little changed at $1,797.27 BondsThe yield on 10-year Treasuries was little changed at 4.43% Japan’s 10-year yield declined 4.5 basis points to 2.600% Australia’s 10-year yield declined four basis points to 4.78% CommoditiesWest Texas Intermediate crude rose 0.2% to $76.21 a barrel Spot gold rose 0.3% to $4,343.54 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Masaki Kondo, Winnie Hsu and Ruth Carson.©2026 Bloomberg L.P.
