Fed

• U.S. stocks rebounded in early trading on Thursday, recovering losses from a previous Federal Reserve-driven sell-off and positioning major indexes for a winning week. • Accenture reported fiscal third-quarter earnings of $3.80 per diluted share, a 9% year-over-year increase that beat Wall Street forecasts. • Despite the earnings beat, Accenture missed revenue estimates with $18.7 billion in sales and lowered its full-year revenue growth forecast to a range of 3% to 4%.

• New Federal Reserve Chair Kevin Warsh held his first news conference on Wednesday after the central bank decided to keep its key interest rate unchanged. • Despite the hold, nearly half of the Fed's policymakers indicated they could support an interest rate hike later this year. • This decision reflects the central bank's ongoing struggle to balance inflation control with economic stability.

• The US Federal Reserve has abandoned its previous bias toward cutting interest rates as inflation has surged to nearly double the central bank's target. • This policy shift coincides with the beginning of the Kevin Warsh era at the central bank and follows escalating geopolitical tensions stemming from Donald Trump’s conflict with Iran. • The decision matters as it signals a pivot toward tighter monetary policy to combat rising prices, potentially slowing economic growth to stabilize the currency.

• Asian stocks declined, with the MSCI regional equities gauge down 0.1% and South Korea’s Kospi dropping 0.6%, following a tech sell-off on Wall Street. • The downturn was driven by a pullback in semiconductor makers, which pushed the S&P 500 down 0.6% and the Nasdaq 100 down nearly 2%. • Investors are currently cautious as they await the first Federal Reserve policy decision under Chairman Kevin Warsh to determine the future path of interest rates.

• Asian currency markets and the U.S. dollar remained largely muted as investors await the upcoming Federal Reserve interest rate decision. • While the Chinese yuan (USD/CNY) and Singapore dollar (USD/SGD) showed little movement, the South Korean won (USD/KRW) rose by 0.4%. • Market participants are closely monitoring the situation in the Middle East, specifically looking for further details regarding a potential truce in Iran.

• The European Central Bank raised its deposit facility rate to 2.25% on June 11, marking its first rate hike since 2023. • In contrast, the U.S. Federal Reserve is expected to maintain its federal funds rate between 3.50% and 3.75% during its June 16-17 meeting. • This divergence in monetary policy is driven by the U.S. AI boom, leading the Fed to adopt a less hawkish stance than the ECB.

• The Federal Reserve maintained its key interest rate on Wednesday but signaled that future rate hikes are likely. • Fed officials revised their year-end PCE inflation projection upward to 3.6%, a significant increase from the estimates provided in March. • This shift has impacted financial markets, with the CME Group's FedWatch tool showing the probability of at least one rate hike by year-end jumping from 60% to 85%.