U.S. airstrikes didn’t destroy Iran’s core nuclear components below ground, according to early Pentagon assessments; however, they are believed to have set back Iran’s nuclear programme by a few months to a year. Oil prices are seeing a small correction higher after slumping $13 in two days—Brent Crude is trading 1% higher at $68 a barrel.
In Fed Chairman Powell’s Semiannual Policy Testimony to Congress yesterday, he reiterated the need to take a cautious approach and not rush to cut interest rates, despite Fed Governors Waller and Bowman signaling they are open to lowering rates as soon as July. Powell also pointed to increased economic uncertainty and said the Fed is closely monitoring the impacts of tariff policies, while maintaining the view that “many paths are possible here.” U.S. 10-year yields and the dollar are both softer, as the market is pricing in just over two rate cuts before the end of the year. We will hear from Chairman Powell again this afternoon at 3:00 p.m. as he testifies before the Senate Committee.
Back in Europe, the EU is rushing to conclude a trade deal with Washington before July 9th. If the U.S. insists on an asymmetrical deal, the EU plans to impose retaliatory tariffs on U.S. imports, including Boeing aircraft.
