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June 17, 2026
Federal Reserve officials left interest rates unchanged and were split over whether they expect to raise rates this year. Policymakers’ new projections indicated nine officials foresee at least one quarter-point hike this year, with six anticipating at least two. Another nine expected no move or a cut. Notably, only 18 officials out of 19 entered their projections for rates at the end of 2026.
The absence of an entry suggests new Chairman Kevin Warsh, who has been critical of so-called forward guidance, declined to submit a rate forecast. In its first gathering under Warsh’s leadership, the Federal Open Market Committee voted unanimously on Wednesday to hold its benchmark federal funds rate in a range of 3.5% to 3.75%.
The decision marked the fourth time officials held rates in place as they continue to shift their concerns from the labor market to inflation, driven in part by the impact of the Iran war on energy prices. In their post-meeting statement, officials said inflation remained elevated and vowed to deliver price stability. They continued to characterize growth as “solid.” Officials also described productivity growth and capital investment as strong. The statement was also shorter than recent post-meeting releases. Its brevity could be a sign of things to come under Warsh, who has promised to shake up the central bank’s communication strategy.
In what may be the most eagerly anticipated debut of a Fed chair in many decades, Warsh is scheduled to hold a press conference at 2:30 p.m. in Washington. He is under pressure to deliver a credible message to investors on managing inflation that has re-accelerated. Yet that may conflict with the expectations of U.S. President Donald Trump, who, in weighing candidates for the job, repeatedly said he wanted a Fed chief who would lower interest rates. 2026-06-17 18:00:01 GMT (Bloomberg)
Retail sales in the U.S. increased in May, according to a report released by the Commerce Department on Wednesday. The Commerce Department said retail sales grew by 0.9% in May after rising by 0.4% in April.
The report showed a notable rebound in sales by motor vehicle and parts dealers, which shot up by 1.2% in May after sliding by 0.9% in April. Excluding the jump in sales of motor vehicle and parts dealers, retail sales still advanced by 0.8% in May after climbing by 0.7% in April. Sales of gas stations helped lead the way higher, spiking by 3.4% in May after surging by 2.4% in April amid higher gasoline prices.
The report also showed significant growth in sales by miscellaneous store retailers, non-store retailers, and furniture and home furnishings stores. Core retail sales, which exclude automobiles, gasoline, building materials, and food services, increased by 0.7% in May after rising by 0.5% in April. 06/17/2026 - 09:43:00 (RTTNews)
Euro traded at 1.1592 against USD at 9:00 AM PST
Eurozone inflation advanced to 3.2% in May, the strongest since September 2023, and remained unchanged, following April's 3.0% increase.
Inflation has remained above the European Central Bank's (ECB) medium-term target of 2% for the third straight month. Core inflation, which excludes energy, food, alcohol, and tobacco, rose to 2.6%. On a monthly basis, the harmonized index of consumer prices (HICP) edged up 0.1% in May.
Energy prices logged an annual growth of 10.8%, the same rate as seen in April. Services’ inflation rose to 3.5% from 3.0%. Non-energy industrial goods prices climbed 0.9%, following a 0.8% gain a month ago. Meanwhile, food inflation softened to 1.9% from 2.4%.
Last week, the ECB raised its interest rates for the first time in nearly three years in a bid to cushion the impact of rising inflation. The deposit rate was raised by 25 basis points to 2.25%. 06/17/2026 - 06:35:00 (RTTNews)
British Pound traded at 1.3396 against USD at 9:00 AM PST
Despite transport cost pressures, U.K. consumer price inflation remained stable in May, ahead of the Bank of England's policy announcement on Thursday. Consumer prices registered an annual increase of 2.8%, the same rate as seen in April.
Meanwhile, core inflation rose to 2.6% from 2.5% in the previous month. Transport costs made the largest upward contribution to inflation, surging 6.8%, the strongest since December 2022. Conversely, food and non-alcoholic beverages provided the downward pressure on inflation.
Services inflation advanced to 3.6% from 3.4%, while growth in goods prices eased to 2.0% from 2.4%. On a monthly basis, consumer prices rose 0.2% in May, slower than the 0.7% increase in April. The Bank of England is set to announce its policy decision on June 18. Markets expect the BoE to hold the rate at 3.75%, the lowest since June 2023. Previously, the bank had reduced the rate by 25 basis points each in August and November 2025.
Factory gate inflation slowed marginally to 4.0% in May from 4.1% a month ago. On the other hand, input price inflation accelerated to the highest since February 2023. Input prices grew 8.7% after rising 7.9% in April. Monthly, output prices climbed 0.5%, slower than the 1.5% rise in April. At the same time, input prices gained only 0.2%, following April's 2.6% increase. 06/17/2026 - 06:07:00 (RTTNews)
This market update is prepared by Cathay Bank for informational purposes only and does not constitute any form of legal, tax or investment advice, nor should it be considered an assurance or guarantee of future exchange rate movements or trends. This information is provided without regard to the specific objectives, financial situations or needs of any recipient. Cathay Bank does not make any representations or warranties about the accuracy, completeness or adequacy of this market update.
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