The Fed’s rate hold and a new US-Iran deal coincide with mixed economic signals and rising geopolitical risks for markets.
The US and Iran finalized a memorandum of understanding, easing tensions but leaving key issues unresolved, including Hormuz transit fees and uranium enrichment. The deal follows warnings from Iran on military red lines and a $300bn reconstruction agreement, signaling long-term regional shifts.
The Federal Reserve held rates steady in June but signaled potential hikes ahead, with December odds near 50%. Analysts remain divided on the Fed’s path, as weak retail data in China and Japan’s yen concerns add to global economic uncertainty. The PBOC set the USD/CNY reference rate at 6.8130, above estimates of 6.7752.
New Zealand’s Q1 GDP grew 0.8% quarter-on-quarter, beating expectations, while Brent crude risks topping $130 if the Strait of Hormuz remains disrupted. US stocks fell as the Fed’s hawkish tone overshadowed the Iran deal’s geopolitical implications.