{"id":213955,"date":"2026-06-18T12:42:55","date_gmt":"2026-06-18T16:42:55","guid":{"rendered":"https:\/\/ibkrcampus.eu\/campus\/uncategorized\/wall-street-comes-back-as-trump-deal-offsets-hawkish-warsh\/"},"modified":"2026-06-22T13:09:46","modified_gmt":"2026-06-22T13:09:46","slug":"wall-street-comes-back-as-trump-deal-offsets-hawkish-warsh","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.eu\/campus\/traders-insight\/ibkr-economic-landscape\/wall-street-comes-back-as-trump-deal-offsets-hawkish-warsh\/","title":{"rendered":"Wall Street Comes Back as Trump Deal Offsets Hawkish Warsh: June 18, 2026"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">A signed interim peace deal between the US and Iran is driving a robust Wall Street comeback as fuel prices and rates plunge. The ferocious rebound arrives on the heels of yesterday afternoon\u2019s turbulence, which was induced by a fresh chapter at the US central bank under new governance. Fed Chair Kevin Warsh\u2019s first presser signaled a significant focus on getting inflation back to the institution\u2019s 2% objective while the leader announced a series of sweeping reforms, including shorter communications, several task forces to raise the effectiveness of policy and the elimination of forward guidance. Stocks and Treasuries reacted terribly, especially as half of the committee envisioned a hike by year-end, but equity and fixed-income investors alike realized that in light of the Strait of Hormuz potentially reopening soon amidst subdued energy costs, much of that hawkishness was already taken into account. As a result, today is a risk-on session with all major equity benchmarks gaining and 9 of the 11 sectors advancing. The yield curve is diving in bull-flattening motion led by the longer tenors as participants factor in greater discipline at the monetary organization and to a lesser extent, heavier-than-anticipated unemployment claims. The greenback is strengthening, meanwhile, even with coupons retreating, as currency watchers dial up the inflation-fighting credibility of the modern leadership, Elsewhere, premiums of volatility protection instrument are sliding in response to folks unwinding hedges while commodities sink. <\/p>\n\n\n\n<h3 id=\"h-unemployment-claims-climb-slightly\" class=\"wp-block-heading\"><strong>Unemployment Claims Climb Slightly<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Unemployment claims are trending higher but remain in the safe zone, according to this morning\u2019s Department of Labor update. Initial applications fell to 226k for the week ended on June 13, beneath the prior period\u2019s 230k but modestly above the median estimate of 225k. Continuing filings for the interval culminating on June 6, meanwhile, rose to 1.810 million, north of the 1.8 million expectation and 1.786 million from the previous time span. Four-week moving averages expanded on both fronts and warrants attention, as last Thursday\u2019s 219.25k and 1.778 million increased to 223.25k and 1.788 million.<\/p>\n\n\n\n<h3 id=\"h-warsh-doesn-t-accept-dual-mandate-tradeoffs\" class=\"wp-block-heading\"><strong>Warsh Doesn&#8217;t Accept Dual-Mandate Tradeoffs<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">One key aspect of the post-statement presser last afternoon was Chair Warsh disputing the traditional tradeoffs between policy tightness and employment health. Under the modern framework, the chief is confident that the central bank can achieve its inflation target without a corresponding deceleration in hiring and growth as analytical efficiencies bridge that gap. Meanwhile, a tempered long-end alongside a strengthening greenback is providing equity investors an important signal about the implications of this hawkish tilt in financial conditions that are predominantly going to affect the shorter tenors along the yield curve. The knee-jerk reaction in yesterday&#8217;s trading is being reversed today as Wall Street sees the path for Warsh to be disciplined regarding price pressures but simultaneously bullish on markets. Threading that needle effectively would satisfy President Trump&#8217;s economic goals of buoyant activity amidst modest cost forces while delivering gains to stock and fixed-income participants alike.<\/p>\n\n\n\n<h2 id=\"h-international-roundup\" class=\"wp-block-heading\"><strong>International Roundup<\/strong><\/h2>\n\n\n\n<h3 id=\"h-bank-of-england-citing-inflation-uncertainty-holds-key-rate\" class=\"wp-block-heading\"><strong>Bank of England, Citing Inflation Uncertainty, Holds Key Rate<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Bank of England (BoE) policymakers voted today to maintain the central bank\u2019s key interest rate at 3.75% shortly after the release of data pointing to labor market weakness, including declining job vacancies. Among the nine-member board, all but two policymakers voted to maintain with Huw Pill and Megan Greene stumping for a 25-basis points hike. The decision to maintain the current rate was widely expected by economists.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While the US government is anticipating a rapid re-opening of the Strait of Hormuz and the resumption of oil shipments, the BoE, in a statement, said that the US-Iran war is making it hard to predict energy prices and the extent that more expensive crude is having on broader inflation. On a favorable note, the country\u2019s Consumer Price Index for May, released just yesterday, showed prices climbing 2.8% year over year y\/y, a more benign result than expectations for a 3% jump.<\/p>\n\n\n\n<h3 id=\"h-unemployment-falls-in-uk-but-other-data-is-weak\" class=\"wp-block-heading\"><strong>Unemployment Falls in UK, But Other Data is Weak<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The UK\u2019s unemployment rate fell from 5% during the first quarter of 2026 to 4.9% for the three-month period ended in April, according to the Office for National Statistics. The drop was unexpected with an economist consensus pointing to no change. The labor market, however, appears to be weakening based on other data released today, including the number of payrolled workers falling 103k or 0.3% year over year (y\/y). Relative to the start of the three-month period, the number of workers was down by 31,000 or 0.1%. Job vacancies, furthermore, fell by 19,000 during the February to May period and by 31,000 y\/y. Payrolls appeared to stabilize during May with a 2k increase. Nevertheless, the number of active workers was down 119,000 or 0.4%, y\/y. Preliminary data, furthermore, depicted a 119k y\/y decline in payrolled employees in May but no change relative to the preceding month. In a related matter, last month saw 31.2k workers apply for unemployment assistance, surpassing the economist consensus estimate of 25.8k and much higher than the 8.3k in April.<\/p>\n\n\n\n<h3 id=\"h-real-wages-in-uk-produce-modest-increase\" class=\"wp-block-heading\"><strong>Real Wages in UK Produce Modest Increase<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Real wage increases, or gains after the impact of inflation, were up only 0.1% ex-bonuses and 1.2% for total pay y\/y during the February through April period. The print is based on the Consumer Price Index including owner occupiers\u2019 housing costs.<\/p>\n\n\n\n<h3 id=\"h-industrial-products-and-raw-material-prices-jump-in-canada\" class=\"wp-block-heading\"><strong>Industrial Products and Raw Material Prices Jump in Canada<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Canada\u2019s Industrial Product Price Index (IPPI) and Raw Materials Price Index (RMPI) both posted large y\/y hikes in May that the country is attributing primarily to the US-Iran war\u2019s supply chain disruptions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The IPPI climbed 1.2% month over month (m\/m) and 13.6% y\/y last month after ascending by 1.6% and 11.1% in April, according to Statistics Canada. Economists anticipated a 1.3% lift for the m\/m metric. Meanwhile, the RMPI was 0.7% higher than during April, when the gauge produced a 2.6% northward movement. While the result was cooler than the 1.1% economist consensus estimate but the annual rate, at 33.4%, accelerated from 31.5% in the preceding period.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The monthly IPPI print was largely driven by higher processed oil costs, which were up 2.5% m\/m. Indeed, when excluding energy and petroleum, the IPPI was only 0.9% higher. Chemicals were another pressure point, posting a 7% gain that was driven primarily by plastic resins and petrochemicals becoming 33.1% and 17% more expensive. Other products with notable inflation and the extent of their sticker changes were as follows:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Primary non-ferrous metal products, 1.1%<\/li>\n\n\n\n<li>Unwrought aluminum and aluminum alloys.5%<\/li>\n\n\n\n<li>Unwrought copper and copper alloys, 4.5%<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-oil-has-mixed-impact-on-canada-rmpi\" class=\"wp-block-heading\"><strong>Oil Has Mixed Impact on Canada RMPI<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The RMPI ex-energy was up 2.2% m\/m compared to the 0.7% climb of the headline version of the gauge. During May, crude oil fell 0.5% m\/m but was still up 58.7% y\/y. The monthly drop was driven by synthetic crude falling 4.3%. Meanwhile, the crop products category and the metal ores, concentrates and scrap group became 2.2% and 0.5% more expensive m\/m.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A signed interim peace deal between the US and Iran is driving a robust Wall Street comeback as fuel prices and rates plunge.<\/p>\n","protected":false},"author":903,"featured_media":201776,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[152,58,146,147,8,12,148,7],"tags":[363,3592,742],"contributors-categories":[370],"class_list":["post-213955","post","type-post","status-publish","format-standard","has-post-thumbnail","category-europe-middle-east-africa","category-ibkr-economic-landscape","category-macro","category-north-america","category-region","category-securities","category-text-articles","category-traders-insight","tag-federal-reserve","tag-iran","tag-oil","contributors-categories-ibkr-macroeconomics"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v28.5) - 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