This Week in Review | Fed Rate Decision, US-Iran, Inflation in Europe (June 19, 2026)

The episode opens with coverage of the Federal Reserve's first policy meeting under new Chairman Kevin Warsh, who replaced Jerome Powell. The Fed held rates steady, but Warsh's communication style marked a sharp departure from his predecessors — his official statement was just 130 words, roughly one-third the length of prior releases, and his press conference offered minimal forward guidance. Markets reacted negatively to the hawkish tone, with the S&P 500 falling over 1.2% and the 2-year Treasury yield spiking 18 basis points intraday to 4.22%. Warsh's posture — focused squarely on recent inflation data — puts him at odds with President Trump's calls for rate cuts. The segment notes that globally, central banks are taking similarly hawkish stances, with the ECB raising its deposit rate to 2.25% (its first hike in nearly three years) while the Bank of England held steady. The hosts remind viewers that rising rates do not necessarily derail bull markets, pointing to the rally that began in October 2022 even amid a Fed hiking cycle.

The second segment covers a US-Iran 14-point memorandum of understanding that temporarily ends hostilities and provides a pathway to reopening the Strait of Hormuz. Under the deal, the US plans to lift its naval blockade while Iran begins demining the strait for commercial shipping. However, both sides have 60 days to finalize additional details before a permanent agreement is reached. The hosts argue that the more important investing lesson is not the deal itself, but rather how markets had already adapted to the strait's closure over the preceding months — citing examples like Saudi Arabia and the UAE routing oil through spare pipeline capacity, producers using truck convoys, Japan finding new suppliers, and countries releasing strategic oil reserves. They note that stocks and oil prices began trending in a more favorable direction back in April, well before any deal was announced, illustrating how markets price in outcomes months in advance.

The final segment reviews May inflation data from the Eurozone, which accelerated to 3.2% year-over-year from 3% in April, while UK inflation held steady at 2.8%, below market expectations of 3%. The hosts argue that energy-driven inflation spikes are typically temporary and not indicative of broad inflationary pressure. They distinguish the current environment from the 2021-2022 inflation surge, which was fueled by massive fiscal stimulus, global money supply growth, and COVID supply chain disruptions. Today, global money supply growth looks normal, and an energy price spike without commensurate money supply expansion may raise prices at the pump without lifting overall inflation, as consumers reallocate spending rather than face a broad price increase. The segment closes with an optimistic outlook, suggesting inflation reality will likely prove better than widely feared, acting as a potential tailwind for the ongoing bull market.