Geopolitical events
On June 11, 2026, U.S. headline inflation was reported at 4.2% for the month of May, driven by an "energy shock" linked to the ongoing Middle East conflict. This data has triggered a significant shift in market expectations, with the probability of a June interest rate hike by the Federal Reserve soaring to 75%. The report represents the first major economic hurdle for newly sworn--in Fed Chair Kevin Warsh, who is expected to prioritize price stability over market volatility. The "Warsh Fed" now faces the complex task of navigating a "regime change" in monetary policy amidst the fiscal uncertainty following the recent failure of the Department of Government Efficiency (DOGE) to meet its savings targets.