A look at the day ahead in European and global markets

By Ankur Banerjee, Asia Finance & Markets Breaking News Correspondent

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Federal Reserve Chairman Kevin Warsh seized the stage in his debut press conference, unveiling an ambitious review with broad ramifications and tacitly turning hawkish by underscoring ‌the central bank's resolve to bring inflation to heel.

While he offered no near-term policy guidance, fresh quarterly projections revealed that nine of the Fed's 19 policymakers now expect at least one rate hike by the end of 2026.

New U.S. Federal Reserve Chairman Kevin Warsh holds a press conference following a two-day meeting of the Federal Open Market Committee (FOMC), at the U.S. Federal Reserve in Washington, D.C., U.S. June 17, 2026. REUTERS/Eric Lee

Warsh, who did not offer a rate forecast of his own, said markets should price assets based on their own reading of the economy, rather than second-guessing how central bank officials ⁠interpret the data. That approach, he said, would spare the Fed a scenario in which "all the financial markets are doing is reflecting back what we've said."

And so, markets have fully priced in a rate increase from the Fed by October, lifting the U.S. Treasury yields, opens new tab and the dollar.

The sweeping Fed review could reshape how the central bank makes decisions and communicates with the public while a short policy statement similar to a format used by former Fed Chairman Alan Greenspan heralded a new era.

It may take time for markets to adjust to a less transparent Fed. In a world where investors parse every ‌word ⁠from policymakers, a central bank that keeps its cards close to its chest could end up fuelling the very volatility it hopes to avoid.

Graphics are produced by Reuters

Elsewhere, the Bank of England is expected to hold rates at 3.75% later on Thursday as it weighs what a tentative truce in the Iran war means for inflation.

The dollar strength has cast a long shadow across currency ⁠markets, leaving the yen on edge as intervention fears resurface following fresh jawboning from Tokyo.

"We are ready to respond appropriately to currency moves as needed at any time," Chief Cabinet Secretary Minoru Kihara told a regular press conference, when ⁠asked about the yen's declines.

The yen has languished around the 160-per-dollar mark for the past days, with even this week's Bank of Japan rate hike offering little relief as speculative net shorts swelled to their highest since ⁠July 2024.