Market Highlight 18.06.2026

The U.S. Federal Reserve (FED) kept interest rates unchanged at its June policy meeting, which concluded in the early hours of Thursday, but many officials indicated that the next move is likely to tilt toward a rate hike. This marks a notable reversal at Mr. Kevin Warsh’s first meeting as Chair and signals how sharply the inflation outlook has shifted. The FED kept the benchmark interest rate unchanged at a range of 3,5% to 3,75%, with unanimous support. However, the quarterly economic projections from officials showed a clear shift: 9 out of 19 members now expect at least one rate hike by year-end, up from zero in March. Only one member projected a possible rate cut, down from 12 members previously. Following the meeting, markets priced in around a 50% probability that interest rates could rise as soon as next month, according to CME Group.

The abrupt shift in policy stance reflects a U.S. economy running hotter than the Federal Reserve had expected. Inflation has reaccelerated this year, driven by the energy shock from the Iran war and a sharp increase in demand linked to the artificial intelligence boom. The labor market, which many economists had feared was weakening, has remained resilient. “We are both able and committed to achieving price stability,” Mr. Warsh said. “That is exactly what we will do.” Three years ago, the Federal Reserve rapidly raised interest rates to their highest level in 2 decades. However, in September 2024, the FED began cutting rates again, lowering interest rates 6 times before pausing late last year. By last night, the FED had signaled that interest rates could remain elevated going forward.

Domestically, the interbank USD/VND exchange rate rose back to 26,325 ahead of the U.S. Central bank’s announcement of its June meeting outcome.

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