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Markets Digest Iran Peace Progress and Fed Rate-Hike Risk — June 22, 2026

  Markets are easing into a cautious start this Monday as investors return from a long weekend — U.S. markets were closed Friday for Juneteenth — and assess a mixed backdrop: tentative optimism over U.S.–Iran peace talks, a newly hawkish Federal Reserve, and a key week of economic data and earnings ahead. Oil is steadying, the Canadian dollar is under modest pressure, and Asian markets rallied while European and U.S. futures drifted slightly lower in early trading. 🍁 Canada — TSX & the Loonie The S&P/TSX Composite Index heads into Monday trading with a cautious tone, sitting near the 34,857 level after slipping 0.32% on Thursday — the last day Canadian markets were open. Energy stocks will be in focus as oil prices stabilize following weeks of volatility tied to the U.S.–Iran conflict and the partial reopening of the Strait of Hormuz. The Canadian dollar is trading at approximately 70.52 cents U.S. (CAD/USD: 0.7052), down about 0.22% on the session. The loonie remains und...
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Fed Faces New Economic Landscape Post-Trump Victory

 

The U.S. Federal Reserve is poised to reduce its benchmark policy rate by a quarter of a percentage point at the conclusion of its policy meeting on Thursday. This decision, while significant, is overshadowed by the broader economic uncertainties following Donald Trump’s re-election.

Trump’s victory introduces potential shifts in economic policies, including changes to tariffs, tax cuts, and immigration, which could significantly impact the Fed’s approach to managing economic growth and inflation. The central bank, which has been focused on combating inflation, may now need to navigate a more complex economic environment with higher federal deficits and potential inflationary pressures.

Market reactions have already been notable, with bond yields rising as investors anticipate a less aggressive rate-cutting cycle from the Fed. The central bank’s challenge will be to balance these new fiscal policies while maintaining its dual mandate of low inflation and low unemployment.

As the Fed moves forward, the relationship between Trump and Fed Chair Jerome Powell will be closely watched, especially given their turbulent history during Trump’s first term. Powell, reappointed by President Joe Biden, has indicated his intention to complete his term, which runs through May 2026.

In summary, the Fed’s upcoming rate cut is just the beginning of what promises to be a complex and challenging period for U.S. monetary policy.


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