Fomc

• Chinese President Xi Jinping is scheduled to visit Washington on September 24, though Beijing may cancel if the U.S. approves a $14 billion arms sale to Taiwan. • Oil prices fell 3.2% following the restoration of a Saudi pipeline, bringing WTI near $102 and Brent below $106. • The Federal Reserve is expected to raise interest rates to a range of 3.75%-4.00% despite demands from Donald Trump for 1% rates.

• The US Federal Reserve is scheduled to announce its interest rate decision at 11:30 PM IST today, September 16. • Fed Chair Kevin Warsh will hold a press conference to discuss the decision at 12:00 AM IST on September 17. • The outcome of this meeting directly impacts borrowing costs and investment strategies for global financial markets.

• The Federal Open Market Committee (FOMC) released the minutes from its July meeting on Wednesday, revealing that officials believe inflation remains elevated. • The meeting involved twelve Fed officials, including the seven Board of Governors members and five regional Reserve Bank presidents, who assess economic conditions to set monetary policy. • This acknowledgment is critical as it signals the Federal Reserve's ongoing struggle to bring inflation down to its target levels, influencing future interest rate decisions.

• European markets experienced a shift from bear steepening to bear flattening, with German yield curve changes ranging from +2.4 bps (30-yr) to +5 bps (2-yr). • EU swap rates increased between 0.9 bps for 30-year and 4.5 bps for 2-year rates, driven by higher energy prices and the US/Iran stalemate. • The EUR/USD failed to break the 1.16 resistance area as weaker risk sentiment and rising oil prices balanced front-end interest rate support.

• The Federal Reserve maintained interest rates at their current levels during the July FOMC meeting, marking the second hold under Chair Kevin Warsh. • The decision comes amid growing dissent within the committee and concerns from economists, such as NerdWallet's Elizabeth Renter, regarding economic unpredictability and affordability challenges. • The move is significant as businesses and consumers seek explicit reassurance from the Fed that inflation will remain controlled despite Chair Warsh's more subtle communication style.

• Asian markets are expected to open lower due to ongoing valuation pressures on technology stocks, coinciding with the start of the FOMC meeting. • Investors are closely monitoring SK Hynix's earnings report, CXMT's second day of trading, and news regarding China's new deep ultraviolet lithography kit. • South Korean shipbuilder Hanwha Ocean reported a second-quarter operating profit of 736.1 billion won ($500.6 million), marking a 98% increase from the previous year.

• The Federal Reserve's June 16-17, 2026, FOMC minutes highlight how ongoing conflict in the Middle East is negatively impacting global economic activity. • Key pressures include rising energy costs and declining consumer and business confidence, specifically affecting Europe and lower-income Asian economies. • Foreign headline inflation has surged due to sharp increases in retail energy and producer prices across these regions.

• Investors are shifting focus to a lighter US economic calendar following the recent payrolls report, though global events remain active. • Key market catalysts for the week include the release of the Institute for Supply Management (ISM) data and the publication of the Federal Open Market Committee (FOMC) meeting minutes. • Market participants are closely monitoring scheduled speeches from Federal Reserve officials to gauge future interest rate trajectories and monetary policy shifts.

• Investors are shifting capital away from AI and technology stocks toward healthcare and defensive sectors due to concerns over high valuations and infrastructure spending sustainability. • The FOMC will release meeting minutes on Wednesday at 2:00pm, offering the first look at policy deliberations under Chair Kevin Warsh since his May 15 appointment. • Economic health will be assessed via Monday's Services PMI and ISM Non-Manufacturing indices, while earnings from PepsiCo (Thursday) and Delta Air Lines (Friday) will test consumer demand.

• The Indian Rupee (INR) opened marginally lower against the US Dollar (USD) at the start of the trading week. • This currency fluctuation occurs as markets prepare for the release of the Federal Open Market Committee (FOMC) meeting minutes. • The movement is significant as investors gauge potential shifts in US monetary policy, which typically influences emerging market currencies like the rupee.

• New Federal Reserve Chair Kevin Warsh presided over his first FOMC meeting, where the committee unanimously decided to keep interest rates unchanged at 3.5%-3.75%. • The decision comes as inflation has reached 4.2%, prompting Warsh to issue a clear pledge to prioritize price stability over political pressure for rate cuts. • Despite inflation concerns, the U.S. economy shows strength with the S&P 500 hitting record highs, strong jobs reports, and continued investment in artificial intelligence.

• Central banks are expected to dominate the global economic agenda this coming week, overshadowing news regarding AI and Iran. • Key US economic indicators will be under scrutiny, with a primary focus on the release of May retail sales data. • Investors are closely monitoring the first FOMC meeting featuring Kevin Warsh, alongside the formal signing of the Iran deal.