JAKARTA - The global financial market is expected to pay more attention to policy signals from Federal Reserve Chairman Kevin Warsh than to the interest rate decision in the Federal Open Market Committee (FOMC) meeting which took place on June 17-18, 2026.
Although the Fed is expected to maintain its benchmark interest rate, market participants are waiting for clues regarding the direction of monetary policy in the face of still high inflation, a strong labor market, and increasing geopolitical uncertainty due to the conflict in the Middle East.
Dilansir dari Anadolu Agency, Rabu 17 Juni, konferensi pers pertama Warsh setelah rapat FOMC dinilai akan menjadi indikator penting untuk mengukur apakah bank sentral Amerika Serikat masih membuka peluang pemangkasan suku bunga atau justru mulai mempertimbangkan sikap yang lebih ketat.
Rabobank's Senior US Strategy Analyst, Philip Marey, assessed that Warsh has the potential to remove the "easing bias" that has been reflected in the Fed's policy statements.
According to Marey, Warsh also has the opportunity to remove the projection of interest rate cuts in 2026 from the dot plot, which is the interest rate projection compiled by Fed officials.
The move is seen as in line with the relatively strong US economic conditions. Inflation based on the consumer price index (CPI) was recorded at 4.2 percent in May, while the average non-farm job creation reached 188,000 per month in the last three months.
"Therefore, the more interesting aspect of Warsh's first press conference after the meeting may be his analytical framework in reading the supply shock from the Middle East," Marey said as quoted by Anadolu Agency.
According to him, Warsh's view of the risk of global supply disruptions will be an important clue regarding the possible direction of interest rates in the next 12 months.
Marey also predicted that the market would pay attention to how Warsh explained the data-based policy approach, forward guidance, and short-term economic projections.
He assessed that as long as the disruption in the Strait of Hormuz still took place and the US labor market remained strong, the Fed would likely keep interest rates throughout the rest of 2026. Rabobank even predicts that a new interest rate cut will occur twice in 2027.
Meanwhile, ING's Head of International Economics, James Knightley, assessed that the combination of still solid economic growth and rising inflation could open up room for the Fed to consider future interest rate hikes.
However, Knightley expects Warsh will not give too strong a signal in his first press conference.
According to him, although the conflict in the Middle East is the main concern of the global market, the US economy is relatively more protected than many other countries due to its higher level of energy independence.
On the other hand, various economic indicators still show the resilience of the American economy. Business surveys indicate that economic growth is in the range of 2 to 2.5 percent, job creation continues, and the stock market still sets a record high.
"We doubt Kevin Warsh will differ from the other 11 members by voting for a rate cut, even though he was appointed chairman by a president who demanded lower rates," Knightley said.
He assessed that the current economic conditions are not strong enough to be a reason for interest rate cuts in the near future.
However, Knightley expects Warsh to return to emphasizing the importance of technology investment as a driver of US economic productivity in the long term.
This increase in productivity is believed to be able to drive economic growth without triggering excessive inflationary pressures, while also opening up room for a lower neutral interest rate in the future.
Thus, although the interest rate decision is expected to remain unchanged, market attention this week will focus on any statements by Warsh that could provide clues about the direction of US monetary policy amid a combination of inflation challenges, economic resilience, and global geopolitical uncertainty.
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