Markets Yawn, the Fed Waits, and Iran Has a Stock Market?
- David Halseth
- 1 hour ago
- 2 min read
For the week ended 6/21/2025.
Welcome to Monday Morning Musings. If you’ve clicked in, I’ll assume you’ve had your fill of geopolitical drama and are craving something soothing, like a lukewarm cup of economic tea. Let’s dive in.
Last week, the FOMC left its benchmark rate untouched, holding steady in the 4.25% to 4.50% range. Jerome and the gang are clearly sticking with the "wait-and-see" playbook as they evaluate the economic ripple effects of the Trump administration's latest policy run. In a twist of dovish optimism, the Fed still anticipates two rate cuts this year – the same forecast as March – even while acknowledging inflation may worsen before it improves.
Why the persistent rate cut projection? The growing threat of job losses. Yep, the Fed’s anxiety has shifted from inflation to employment, with weakening labor market signals moving to the top of the worry list. But don’t get too cozy, should inflation pull a comeback tour, those cuts may be yanked faster than a Fed Chair at a press conference.
Now, if I could say the markets responded rationally to the Fed news… but alas, the real spotlight was on the Middle East. And here’s the shocker: the market mostly shrugged. U.S. equities slipped just 0.1%, while foreign stocks took a full percentage point dip. Elsewhere? Bonds, commodities, and even liquid alternatives posted gains. Not bad for a week that flirted with geopolitical chaos.
And yes, Iran does have a stock exchange – the Tehran Stock Exchange has been around since 1967. Market cap? Who knows. Trading volumes? Debatable. But fun trivia for your next awkward dinner party.
Back to reality: All major asset classes are now in the black for 2025. That’s right. Despite war headlines, Fed angst, and all the usual doomscrolling material, your portfolio likely looks better than you think. Chicken Little can take the week off.
Looking ahead: This week brings June’s consumer confidence numbers, a revision to Q1 GDP, and global PMI data. Could they move markets? Maybe. Should you cancel your evening patio plans over it? Absolutely not.
So with the summer solstice behind us, may your days be long, your evenings longer, and your espresso hot, preferably Italian-style. Happy Monday.
Interesting data point of the week.
