June 18th Financial Breakfast: Fed Releases Hawkish Signals, Gold Hesitant to Rally? Oil Price Showdown: Trump Signs Deal vs. Iran Talks Postponed
2026-06-18 07:30:45
On Thursday (June 18, Beijing time) in early Asian trading, spot gold was trading around $4,280 per ounce. Gold prices fell nearly 2% on Wednesday, despite the Federal Reserve keeping policy rates unchanged at 3.50%-3.75%. However, the committee's hawkish stance and the removal of previous wording hinting at a possible rate cut this year from the Fed's policy statement, along with the complete elimination of any forward guidance on future interest rate actions, contributed to the decline. US crude oil was trading around $75 per barrel, having briefly approached $74 per barrel on Wednesday. Trump confirmed the signing of the US-Iran memorandum of understanding, and the US released the official text of the memorandum. However, the Iranian Foreign Ministry stated that Friday's talks between Switzerland and Turkey would be postponed, describing Iran as a "wounded lion" of superpower strength.
U.S. stocks closed sharply lower on Wednesday, with the Dow Jones Industrial Average falling 0.98% to 51,492.55, the S&P 500 down 1.21% to 7,420.10, and the Nasdaq Composite down 1.34% to 26,021.66, ending a run of record closing highs. This was mainly due to the Federal Reserve releasing strong hawkish signals while keeping interest rates unchanged.
Newly appointed Chairman Warsh emphasized the necessity of curbing inflation. The latest quarterly forecasts show that nine officials expect at least one rate hike before the end of 2026. The policy statement removed the wording about possible rate cuts, and Warsh did not submit his personal interest rate forecasts, leading to a sharp rise in market expectations for rate hikes. Short-term interest rate futures pricing shows that the probability of a rate hike in September is now higher than that of keeping rates unchanged, and the probability of keeping rates unchanged before the end of the year has plummeted from 40% on Tuesday to about 13%.
All 11 sectors of the S&P 500 closed lower, with the communication services sector falling the most by about 3%. The industrial sector was relatively resilient, declining by only 0.1%. Regional bank stocks underperformed the broader market due to their sensitivity to interest rates, with the KBW Regional Banks Index closing down 1.8%. The Home Builders ETF fell 2.3%, while the Chicago Board Options Exchange Volatility Index (VIX) rose 2 points to 18.44, its biggest gain in four days.
Economic data released that day showed retail sales in May exceeded expectations, but the earlier decline in oil prices and the rise in stocks, driven by the preliminary peace agreement between the US and Iran, were reversed as Trump said the agreement was not the final version and that war could resume.
In terms of individual stocks, SpaceX fell 4.9% on its first day of trading after listing, CME Group fell 3.5% due to its CEO's resignation, while Allbirds surged 39% after changing its name and appointing a former Amazon executive as CEO. The market trading volume was 23.66 billion shares, higher than the average level of the past 20 trading days.
Gold prices fell nearly 2% on Wednesday, with spot gold closing at $4,257.60 per ounce, mainly due to the Federal Reserve keeping policy rates unchanged at 3.50%-3.75%. However, its latest quarterly forecasts showed that nine of the 19 policymakers believed borrowing costs would need to be raised later this year, and the policy statement removed previous wording that hinted at a possible rate cut. Newly appointed Fed Chairman Warsh announced at his first post-meeting press conference that five working groups would be established to review key policy areas and emphasized the need to curb inflation.
Independent metals trader Tai Wong described Warsh as "quick-witted, decisive, and energetic," noting that his statement that "interest rates are only tightening in the housing sector" was more hawkish than that of his predecessor Powell. This caused the market's bet on a December rate hike to jump from 61% before the decision to 78%. After the decision was announced, the dollar continued to rise, making dollar-denominated gold more expensive for overseas buyers. At the same time, rising oil prices exacerbated inflation concerns, further pressuring gold prices.
Other precious metals also fell across the board, with silver down nearly 3% to $67.91, platinum down 2% to $1768.03, and palladium down 3% to $1309.25.
Oil prices rose nearly 1% on Wednesday, with Brent crude closing up 0.75% at $79.55 a barrel and WTI crude closing up 0.97% at $76.79 a barrel. This was mainly due to US President Trump's statement that the latest ceasefire memorandum of understanding with Iran was not final and that he could resume airstrikes if he was not satisfied or if Iran did not "behave" properly. This provided impetus for the oil price rebound following Sunday's announcement that the US and Iran had reached an agreement to end the war and reopen the Strait of Hormuz.
Fawad Razaqzada, a market analyst at City Index and FOREX, pointed out that the continued uncertainty in the United States makes the rebound in oil prices from the previous sharp decline logical.
On the supply side, data from the U.S. Energy Information Administration showed that crude oil inventories fell for the tenth consecutive week last week, with total inventories dropping to their lowest level since 1985. The war with Iran continues to disrupt the global energy market, but the shadow of oversupply has already emerged. In its first outlook for 2027, the International Energy Agency predicted that the oil market will face a significant oversupply, with global supply expected to surge by 8 million barrels per day while demand grows by only 2 million barrels per day. At the same time, the agency said that a short-term U.S.-Iran agreement should provide an opportunity to replenish depleted inventories or establish new strategic reserves, but industry officials pointed out that a full recovery to pre-war production and refining levels could take weeks, months, or even years.
The dollar index rose 0.82% on Wednesday, reaching a high of 100.57, a near one-week high, mainly due to the Federal Reserve keeping its policy rate unchanged at 3.50%-3.75%. However, the latest quarterly forecasts showed that nine of the 19 policymakers expect at least one rate hike by the end of 2026, and the updated policy statement removed previous wording that hinted at a possible rate cut this year and completely eliminated any forward guidance on future interest rate actions. This reflects the new chairman, Warsh, quickly imprinting his personal mark—significantly revising the format of official statements and removing background information that is usually carefully interpreted by the market.
Meanwhile, the Federal Reserve raised its inflation forecast for the end of 2026 from 2.7% to 3.6%. Karl Schamotta, chief market strategist at Corpay, pointed out that the committee's stance shifted sharply to hawkish, with policymakers believing the US-Iran agreement would not significantly alleviate price pressures and expecting at least one rate hike this year—a stark contrast to previous expectations of rate cuts. The market was shocked, and yields rose along with interest rate expectations. The dollar strengthened against all major currencies; the euro fell 0.93% to 1.1499 against the dollar, and the pound fell 1.01% to 1.3291. Market focus is on Thursday's Bank of England meeting, where policy is expected to remain unchanged, but the focus will be on the tone of policymakers' speeches. UK inflation unexpectedly held steady at 2.8% in May, matching a 13-month low, and the market expects one rate hike before the end of the year.
The yen traded at 160.63 against the dollar, a slight increase of 0.11%. Traders were closely watching whether Japanese authorities would intervene to support the weak yen, after the Bank of Japan raised interest rates to their highest level in 31 years on Tuesday and hinted at further tightening but did not reveal the timing of the next rate hike.
The Swedish krona fell 0.8% to 9.5028 against the dollar after the central bank kept interest rates unchanged. The central bank said the Middle East war had exacerbated inflationary pressures and increased the likelihood of a rate hike, but core inflation was low and economic activity was slightly weak.
Iranian Foreign Ministry: Friday's talks between Switzerland and Turkey postponed; Iran described as a "wounded lion" superpower.
Iranian Foreign Ministry spokesman Baghae stated that the Iran-US talks originally scheduled for Friday (June 19) in Switzerland are "no longer certain" following the signing of the memorandum of understanding, and both sides have decided to postpone the talks. In his statement, Baghae claimed that Iran had defeated two nuclear powers with multinational backing, emphasizing that Iran is "a real superpower," not just making empty promises. He also stated that enemies had inflicted deep wounds on Iran, claiming countless lives and leaving the country devastated. However, he stressed, "A wounded lion is still a lion." This statement is seen as Iran demonstrating a tough stance externally while reaffirming its influence and strategic position in the region.
The United States released the official text of the memorandum of understanding reached with Iran.
According to a CNN report on the 17th, a senior U.S. government official read aloud the official text of the memorandum of understanding reached between the United States and Iran. The document contains 14 articles detailing the reopening of the Strait of Hormuz and the easing of some financial restrictions on Iran, and clarifies the expected goals for resolving the Iranian nuclear issue in future technical talks. The document is titled "Memorandum of Understanding between the United States of America and the Islamic Republic of Iran in Islamabad." The official said this is an agreement that could immediately open the Strait of Hormuz and prompt Iran to dismantle its nuclear materials. It also establishes a dynamic adjustment mechanism: if Iran shows more goodwill, the U.S. will correspondingly increase economic and sanctions relief. According to the document, the United States and Iran immediately and permanently cease military operations on all fronts, including Lebanon, and pledged not to wage war or take military action against each other in the future. The final agreement will confirm the permanent end of the war on all fronts, including Lebanon. The United States and Iran pledged to negotiate and reach a final agreement within a maximum of 60 days. The United States will immediately begin to lift the naval blockade against Iran after the signing of the memorandum of understanding, and will completely lift the naval blockade within 30 days. The United States also pledged to withdraw its troops from the region surrounding Iran within 30 days after the final agreement is reached. The United States pledged to work with regional partners to invest at least $300 billion in Iran's reconstruction and economic development, and the implementation mechanism will be finalized within 60 days as part of the final agreement. The United States pledged to end all sanctions against Iran and to open up frozen or restricted funds and assets in Iran after the implementation of the memorandum of understanding. Iran will ensure that merchant ships can pass safely and free of charge between the Persian Gulf and the Sea of Oman within 60 days after the signing of the memorandum of understanding, and Iran will carry out mine clearance work within 30 days. Iran reiterated that it will not acquire or develop nuclear weapons, and both sides agreed to conduct on-site dilution of Iran's enriched uranium under the supervision of the International Atomic Energy Agency. Previously, a senior US government official stated on the 15th that the US and Iran had signed a memorandum of understanding electronically, and a formal signing ceremony would be held in Switzerland on the 19th. However, US President Trump said at a press conference in France on the 17th that the US-Iran memorandum of understanding might be signed on the 18th or 19th. The Islamic Republic News Agency of Iran also released the full text of the US-Iran memorandum of understanding on the evening of the 17th local time. (Xinhua)
The probability of a Federal Reserve rate hike this year has risen to 83.1%.
According to CME's FedWatch Tool: The probability of the Federal Reserve keeping interest rates unchanged by October is 44.1%, the probability of a rate hike of at least 25 basis points is 44.3%, and the probability of a rate cut of 25 basis points is 11.6%. The probability of the Federal Reserve keeping interest rates unchanged by December is 15.5%, the probability of a rate hike of at least 25 basis points is 83.1% (compared to 59.4% the previous day), and the probability of a rate cut of 25 basis points is 1.4%.
Iranian Foreign Ministry Spokesperson: The US must end its naval blockade within 30 days
According to Iranian sources on June 17, Iranian Foreign Ministry spokesman Baghae stated that if Israel continues its occupation of Lebanon, it will be considered a violation of the memorandum of understanding, and Iran will take necessary measures. Baghae said that the US and Iran have reached an agreement to begin negotiations on a final agreement within the next 60 days. The US must end its maritime blockade within 30 days. Baghae stated that regarding the Strait of Hormuz, it has been agreed to restore normal maritime traffic within a specific timeframe. This is Iran's own responsibility and will be entirely carried out by Iran, without the need for participation or intervention from other parties. Iran will cooperate with Oman in developing a management mechanism for the Strait of Hormuz. If necessary, it will also exchange views with other countries in the region. (CCTV News)
Key points of the Federal Reserve interest rate decision
1. The Federal Open Market Committee unanimously voted to maintain the target range for the benchmark interest rate at 3.5%-3.75%. 2. The dot plot, reflecting interest rate projections, shows that officials are divided on whether to raise interest rates before the end of 2026. Nine out of 18 officials expect a rate hike, with the median projection rising to 3.75% from 3.4% in March. The median projection also indicates that rates will fall to 3.6% in 2027. 3. One Fed official did not submit any interest rate projections; another official did not provide a 2028 rate projection. 4. The median projection from Fed officials shows core inflation at 3.3% by the end of 2026, higher than the 2.7% projected in March; GDP growth is expected to be 2.2%, lower than the previous projection of 2.4%. 5. The Fed streamlined its policy statement, removing wording about possible further interest rate adjustments and stating that "the Committee will pursue price stability." 6. The Fed stated that "despite a high degree of uncertainty caused by factors such as the Middle East conflict, economic activity is expanding at a solid pace," and that "productivity growth and capital investment are strong." 7. The Federal Reserve stated that job growth "has kept pace with labor force growth and the unemployment rate has changed little"; inflation remains high, "partly reflecting supply shocks that have led to price increases in sectors such as energy."
The Federal Reserve's dot plot shows that nine officials expect interest rate hikes to occur in 2026.
The Federal Reserve's dot plot shows that only 18 of the 19 officials submitted their dot plot projections. Of the 18 officials, one believes there should be a cumulative 75 basis point rate hikes over the remainder of 2026, five believe there should be a cumulative 50 basis point hikes, three believe there should be a cumulative 25 basis point hikes, eight believe interest rates should remain unchanged, and one believes there should be a cumulative 25 basis point rate cuts.
Report: The United States and Iran are discussing signing an agreement ahead of schedule.
According to Axios, citing a diplomat from a mediating country and another source, the United States, Iran, and other mediators are discussing bringing forward the signing of the memorandum of understanding, originally scheduled for Friday, to Wednesday as early as possible. If the signing is brought forward, the memorandum of understanding will be signed electronically; the clauses concerning the Strait of Hormuz will take effect immediately, and the United States may eventually release the full text of the agreement. The diplomat stated that the core purpose of the discussions to shorten the process and sign the agreement earlier is to open the Strait of Hormuz passage as soon as it was originally scheduled for Friday, and the US and Iran share the same position on this demand. Another driving factor may be the domestic political pressure faced by the White House to release the text of the memorandum of understanding. However, sources indicate that it is Iran that has requested that the full text of the agreement not be disclosed before the formal signing, and deny that the White House's move is to cope with domestic political pressure.
Iran's Foreign Ministry: The 60-day period begins today; warns Israel that an attack on Lebanon would constitute a breach of contract.
Iranian Foreign Ministry spokesman Baghae confirmed that the 60-day transition period, according to the text of the US-Iran memorandum of understanding, officially began on June 18. The spokesman warned that if the Israeli regime continues its attacks on Lebanon, this will be considered a violation of its commitments under the memorandum. Despite the significant differences in the methods used by the US and Israel, Iran will not view the two as separate entities. Baghae pointed out that the Israeli regime is unwilling to leave room for any diplomatic process to advance, but the US has a responsibility to compel Israel to abide by the commitments it made to Iran under this agreement.
The US-Iran memorandum of understanding has been electronically signed, and a formal ceremony will be held in Switzerland on Friday.
Iranian Foreign Ministry spokesman Baghae announced early on June 18 local time that the text of the memorandum of understanding between Iran and the United States had been finalized and signed remotely electronically. White House officials subsequently confirmed that President Trump had signed the document. Baghae emphasized that the US-Iran meeting in Switzerland this Friday (June 19) was "not aimed at signing the memorandum of understanding"—the signing process had been completed ahead of schedule, and the Iranian negotiating team would proceed to Switzerland as planned. According to Axios, the meeting between the US and Iranian delegations, led by US Vice President Vance and Iranian Parliament Speaker Ghalibaf respectively, is still expected to take place in Switzerland on Friday as scheduled. Previously, a senior US official had revealed at a press briefing that Trump and Vance had signed the memorandum of understanding, and Iranian Parliament Speaker Ghalibaf had signed the document on behalf of Iran. Vance would then lead the US side into the next phase of negotiations. According to US officials, the memorandum of understanding was originally planned to be released publicly within 24 to 48 hours of signing, but Trump later stated that the document would be released after the formal signing ceremony. The core of this memorandum of understanding covers three main points: ensuring the immediate opening of the Strait of Hormuz, ensuring Iran never possesses nuclear weapons, and that the United States is willing to fundamentally change bilateral relations if Iran is willing to change its behavior. Vance revealed that the memorandum is about one and a half pages long and relatively general in content; many details will be finalized during the subsequent 60-day technical negotiations. Iran's Deputy Foreign Minister previously stated that after the signing of the memorandum of understanding between the US and Iran on the 19th, Iran will initiate subsequent negotiations depending on the US's fulfillment of its commitments. Vance also emphasized that the US attitude towards Iran is based on verifiable actions and results, not trust. If Tehran fails to fulfill its commitments, the US will reassess all options, including restoring economic sanctions, reimposing blockade measures, and even launching another military strike.
Several domestically produced high-speed optical communication chips have entered mass production; domestic optical fiber production capacity is projected to extend to 2027.
This year, the AI computing power wave has swept the globe. If we compare large AI models to the most powerful brains, then optical communication is the "high-speed blood vessels" that deliver massive amounts of data to them. Over the past year, multiple high-speed optical communication chip products adapted to supercomputing centers have completed process verification and have successively entered the mass production and delivery stages, continuously filling the gap in the domestic supply of high-end optical chips. As the core medium for information transmission, optical fiber is a key infrastructure connecting computing power and data. This year, the sales of optical fiber products of a company in Wujiang, Suzhou, have increased by more than 35% year-on-year. The rapid growth in demand for new optical fiber products from data centers has led to a continuous supply shortage for this company's products. "Our orders are almost full every month. We focus on selecting major customers and plan our future production capacity. Currently, our production capacity is planned to extend to the first quarter of 2027." (CCTV Finance)
Key Focus Today
stock market
U.S. stocks closed sharply lower on Wednesday, with the Dow Jones Industrial Average falling 0.98% to 51,492.55, the S&P 500 down 1.21% to 7,420.10, and the Nasdaq Composite down 1.34% to 26,021.66, ending a run of record closing highs. This was mainly due to the Federal Reserve releasing strong hawkish signals while keeping interest rates unchanged.
Newly appointed Chairman Warsh emphasized the necessity of curbing inflation. The latest quarterly forecasts show that nine officials expect at least one rate hike before the end of 2026. The policy statement removed the wording about possible rate cuts, and Warsh did not submit his personal interest rate forecasts, leading to a sharp rise in market expectations for rate hikes. Short-term interest rate futures pricing shows that the probability of a rate hike in September is now higher than that of keeping rates unchanged, and the probability of keeping rates unchanged before the end of the year has plummeted from 40% on Tuesday to about 13%.
All 11 sectors of the S&P 500 closed lower, with the communication services sector falling the most by about 3%. The industrial sector was relatively resilient, declining by only 0.1%. Regional bank stocks underperformed the broader market due to their sensitivity to interest rates, with the KBW Regional Banks Index closing down 1.8%. The Home Builders ETF fell 2.3%, while the Chicago Board Options Exchange Volatility Index (VIX) rose 2 points to 18.44, its biggest gain in four days.
Economic data released that day showed retail sales in May exceeded expectations, but the earlier decline in oil prices and the rise in stocks, driven by the preliminary peace agreement between the US and Iran, were reversed as Trump said the agreement was not the final version and that war could resume.
In terms of individual stocks, SpaceX fell 4.9% on its first day of trading after listing, CME Group fell 3.5% due to its CEO's resignation, while Allbirds surged 39% after changing its name and appointing a former Amazon executive as CEO. The market trading volume was 23.66 billion shares, higher than the average level of the past 20 trading days.
Gold Market
Gold prices fell nearly 2% on Wednesday, with spot gold closing at $4,257.60 per ounce, mainly due to the Federal Reserve keeping policy rates unchanged at 3.50%-3.75%. However, its latest quarterly forecasts showed that nine of the 19 policymakers believed borrowing costs would need to be raised later this year, and the policy statement removed previous wording that hinted at a possible rate cut. Newly appointed Fed Chairman Warsh announced at his first post-meeting press conference that five working groups would be established to review key policy areas and emphasized the need to curb inflation.
Independent metals trader Tai Wong described Warsh as "quick-witted, decisive, and energetic," noting that his statement that "interest rates are only tightening in the housing sector" was more hawkish than that of his predecessor Powell. This caused the market's bet on a December rate hike to jump from 61% before the decision to 78%. After the decision was announced, the dollar continued to rise, making dollar-denominated gold more expensive for overseas buyers. At the same time, rising oil prices exacerbated inflation concerns, further pressuring gold prices.
Other precious metals also fell across the board, with silver down nearly 3% to $67.91, platinum down 2% to $1768.03, and palladium down 3% to $1309.25.
oil market
Oil prices rose nearly 1% on Wednesday, with Brent crude closing up 0.75% at $79.55 a barrel and WTI crude closing up 0.97% at $76.79 a barrel. This was mainly due to US President Trump's statement that the latest ceasefire memorandum of understanding with Iran was not final and that he could resume airstrikes if he was not satisfied or if Iran did not "behave" properly. This provided impetus for the oil price rebound following Sunday's announcement that the US and Iran had reached an agreement to end the war and reopen the Strait of Hormuz.
Fawad Razaqzada, a market analyst at City Index and FOREX, pointed out that the continued uncertainty in the United States makes the rebound in oil prices from the previous sharp decline logical.
On the supply side, data from the U.S. Energy Information Administration showed that crude oil inventories fell for the tenth consecutive week last week, with total inventories dropping to their lowest level since 1985. The war with Iran continues to disrupt the global energy market, but the shadow of oversupply has already emerged. In its first outlook for 2027, the International Energy Agency predicted that the oil market will face a significant oversupply, with global supply expected to surge by 8 million barrels per day while demand grows by only 2 million barrels per day. At the same time, the agency said that a short-term U.S.-Iran agreement should provide an opportunity to replenish depleted inventories or establish new strategic reserves, but industry officials pointed out that a full recovery to pre-war production and refining levels could take weeks, months, or even years.
Foreign exchange market
The dollar index rose 0.82% on Wednesday, reaching a high of 100.57, a near one-week high, mainly due to the Federal Reserve keeping its policy rate unchanged at 3.50%-3.75%. However, the latest quarterly forecasts showed that nine of the 19 policymakers expect at least one rate hike by the end of 2026, and the updated policy statement removed previous wording that hinted at a possible rate cut this year and completely eliminated any forward guidance on future interest rate actions. This reflects the new chairman, Warsh, quickly imprinting his personal mark—significantly revising the format of official statements and removing background information that is usually carefully interpreted by the market.
Meanwhile, the Federal Reserve raised its inflation forecast for the end of 2026 from 2.7% to 3.6%. Karl Schamotta, chief market strategist at Corpay, pointed out that the committee's stance shifted sharply to hawkish, with policymakers believing the US-Iran agreement would not significantly alleviate price pressures and expecting at least one rate hike this year—a stark contrast to previous expectations of rate cuts. The market was shocked, and yields rose along with interest rate expectations. The dollar strengthened against all major currencies; the euro fell 0.93% to 1.1499 against the dollar, and the pound fell 1.01% to 1.3291. Market focus is on Thursday's Bank of England meeting, where policy is expected to remain unchanged, but the focus will be on the tone of policymakers' speeches. UK inflation unexpectedly held steady at 2.8% in May, matching a 13-month low, and the market expects one rate hike before the end of the year.
The yen traded at 160.63 against the dollar, a slight increase of 0.11%. Traders were closely watching whether Japanese authorities would intervene to support the weak yen, after the Bank of Japan raised interest rates to their highest level in 31 years on Tuesday and hinted at further tightening but did not reveal the timing of the next rate hike.
The Swedish krona fell 0.8% to 9.5028 against the dollar after the central bank kept interest rates unchanged. The central bank said the Middle East war had exacerbated inflationary pressures and increased the likelihood of a rate hike, but core inflation was low and economic activity was slightly weak.
International News
Iranian Foreign Ministry: Friday's talks between Switzerland and Turkey postponed; Iran described as a "wounded lion" superpower.
Iranian Foreign Ministry spokesman Baghae stated that the Iran-US talks originally scheduled for Friday (June 19) in Switzerland are "no longer certain" following the signing of the memorandum of understanding, and both sides have decided to postpone the talks. In his statement, Baghae claimed that Iran had defeated two nuclear powers with multinational backing, emphasizing that Iran is "a real superpower," not just making empty promises. He also stated that enemies had inflicted deep wounds on Iran, claiming countless lives and leaving the country devastated. However, he stressed, "A wounded lion is still a lion." This statement is seen as Iran demonstrating a tough stance externally while reaffirming its influence and strategic position in the region.
The United States released the official text of the memorandum of understanding reached with Iran.
According to a CNN report on the 17th, a senior U.S. government official read aloud the official text of the memorandum of understanding reached between the United States and Iran. The document contains 14 articles detailing the reopening of the Strait of Hormuz and the easing of some financial restrictions on Iran, and clarifies the expected goals for resolving the Iranian nuclear issue in future technical talks. The document is titled "Memorandum of Understanding between the United States of America and the Islamic Republic of Iran in Islamabad." The official said this is an agreement that could immediately open the Strait of Hormuz and prompt Iran to dismantle its nuclear materials. It also establishes a dynamic adjustment mechanism: if Iran shows more goodwill, the U.S. will correspondingly increase economic and sanctions relief. According to the document, the United States and Iran immediately and permanently cease military operations on all fronts, including Lebanon, and pledged not to wage war or take military action against each other in the future. The final agreement will confirm the permanent end of the war on all fronts, including Lebanon. The United States and Iran pledged to negotiate and reach a final agreement within a maximum of 60 days. The United States will immediately begin to lift the naval blockade against Iran after the signing of the memorandum of understanding, and will completely lift the naval blockade within 30 days. The United States also pledged to withdraw its troops from the region surrounding Iran within 30 days after the final agreement is reached. The United States pledged to work with regional partners to invest at least $300 billion in Iran's reconstruction and economic development, and the implementation mechanism will be finalized within 60 days as part of the final agreement. The United States pledged to end all sanctions against Iran and to open up frozen or restricted funds and assets in Iran after the implementation of the memorandum of understanding. Iran will ensure that merchant ships can pass safely and free of charge between the Persian Gulf and the Sea of Oman within 60 days after the signing of the memorandum of understanding, and Iran will carry out mine clearance work within 30 days. Iran reiterated that it will not acquire or develop nuclear weapons, and both sides agreed to conduct on-site dilution of Iran's enriched uranium under the supervision of the International Atomic Energy Agency. Previously, a senior US government official stated on the 15th that the US and Iran had signed a memorandum of understanding electronically, and a formal signing ceremony would be held in Switzerland on the 19th. However, US President Trump said at a press conference in France on the 17th that the US-Iran memorandum of understanding might be signed on the 18th or 19th. The Islamic Republic News Agency of Iran also released the full text of the US-Iran memorandum of understanding on the evening of the 17th local time. (Xinhua)
The probability of a Federal Reserve rate hike this year has risen to 83.1%.
According to CME's FedWatch Tool: The probability of the Federal Reserve keeping interest rates unchanged by October is 44.1%, the probability of a rate hike of at least 25 basis points is 44.3%, and the probability of a rate cut of 25 basis points is 11.6%. The probability of the Federal Reserve keeping interest rates unchanged by December is 15.5%, the probability of a rate hike of at least 25 basis points is 83.1% (compared to 59.4% the previous day), and the probability of a rate cut of 25 basis points is 1.4%.
Iranian Foreign Ministry Spokesperson: The US must end its naval blockade within 30 days
According to Iranian sources on June 17, Iranian Foreign Ministry spokesman Baghae stated that if Israel continues its occupation of Lebanon, it will be considered a violation of the memorandum of understanding, and Iran will take necessary measures. Baghae said that the US and Iran have reached an agreement to begin negotiations on a final agreement within the next 60 days. The US must end its maritime blockade within 30 days. Baghae stated that regarding the Strait of Hormuz, it has been agreed to restore normal maritime traffic within a specific timeframe. This is Iran's own responsibility and will be entirely carried out by Iran, without the need for participation or intervention from other parties. Iran will cooperate with Oman in developing a management mechanism for the Strait of Hormuz. If necessary, it will also exchange views with other countries in the region. (CCTV News)
Key points of the Federal Reserve interest rate decision
1. The Federal Open Market Committee unanimously voted to maintain the target range for the benchmark interest rate at 3.5%-3.75%. 2. The dot plot, reflecting interest rate projections, shows that officials are divided on whether to raise interest rates before the end of 2026. Nine out of 18 officials expect a rate hike, with the median projection rising to 3.75% from 3.4% in March. The median projection also indicates that rates will fall to 3.6% in 2027. 3. One Fed official did not submit any interest rate projections; another official did not provide a 2028 rate projection. 4. The median projection from Fed officials shows core inflation at 3.3% by the end of 2026, higher than the 2.7% projected in March; GDP growth is expected to be 2.2%, lower than the previous projection of 2.4%. 5. The Fed streamlined its policy statement, removing wording about possible further interest rate adjustments and stating that "the Committee will pursue price stability." 6. The Fed stated that "despite a high degree of uncertainty caused by factors such as the Middle East conflict, economic activity is expanding at a solid pace," and that "productivity growth and capital investment are strong." 7. The Federal Reserve stated that job growth "has kept pace with labor force growth and the unemployment rate has changed little"; inflation remains high, "partly reflecting supply shocks that have led to price increases in sectors such as energy."
The Federal Reserve's dot plot shows that nine officials expect interest rate hikes to occur in 2026.
The Federal Reserve's dot plot shows that only 18 of the 19 officials submitted their dot plot projections. Of the 18 officials, one believes there should be a cumulative 75 basis point rate hikes over the remainder of 2026, five believe there should be a cumulative 50 basis point hikes, three believe there should be a cumulative 25 basis point hikes, eight believe interest rates should remain unchanged, and one believes there should be a cumulative 25 basis point rate cuts.
Report: The United States and Iran are discussing signing an agreement ahead of schedule.
According to Axios, citing a diplomat from a mediating country and another source, the United States, Iran, and other mediators are discussing bringing forward the signing of the memorandum of understanding, originally scheduled for Friday, to Wednesday as early as possible. If the signing is brought forward, the memorandum of understanding will be signed electronically; the clauses concerning the Strait of Hormuz will take effect immediately, and the United States may eventually release the full text of the agreement. The diplomat stated that the core purpose of the discussions to shorten the process and sign the agreement earlier is to open the Strait of Hormuz passage as soon as it was originally scheduled for Friday, and the US and Iran share the same position on this demand. Another driving factor may be the domestic political pressure faced by the White House to release the text of the memorandum of understanding. However, sources indicate that it is Iran that has requested that the full text of the agreement not be disclosed before the formal signing, and deny that the White House's move is to cope with domestic political pressure.
Iran's Foreign Ministry: The 60-day period begins today; warns Israel that an attack on Lebanon would constitute a breach of contract.
Iranian Foreign Ministry spokesman Baghae confirmed that the 60-day transition period, according to the text of the US-Iran memorandum of understanding, officially began on June 18. The spokesman warned that if the Israeli regime continues its attacks on Lebanon, this will be considered a violation of its commitments under the memorandum. Despite the significant differences in the methods used by the US and Israel, Iran will not view the two as separate entities. Baghae pointed out that the Israeli regime is unwilling to leave room for any diplomatic process to advance, but the US has a responsibility to compel Israel to abide by the commitments it made to Iran under this agreement.
The US-Iran memorandum of understanding has been electronically signed, and a formal ceremony will be held in Switzerland on Friday.
Iranian Foreign Ministry spokesman Baghae announced early on June 18 local time that the text of the memorandum of understanding between Iran and the United States had been finalized and signed remotely electronically. White House officials subsequently confirmed that President Trump had signed the document. Baghae emphasized that the US-Iran meeting in Switzerland this Friday (June 19) was "not aimed at signing the memorandum of understanding"—the signing process had been completed ahead of schedule, and the Iranian negotiating team would proceed to Switzerland as planned. According to Axios, the meeting between the US and Iranian delegations, led by US Vice President Vance and Iranian Parliament Speaker Ghalibaf respectively, is still expected to take place in Switzerland on Friday as scheduled. Previously, a senior US official had revealed at a press briefing that Trump and Vance had signed the memorandum of understanding, and Iranian Parliament Speaker Ghalibaf had signed the document on behalf of Iran. Vance would then lead the US side into the next phase of negotiations. According to US officials, the memorandum of understanding was originally planned to be released publicly within 24 to 48 hours of signing, but Trump later stated that the document would be released after the formal signing ceremony. The core of this memorandum of understanding covers three main points: ensuring the immediate opening of the Strait of Hormuz, ensuring Iran never possesses nuclear weapons, and that the United States is willing to fundamentally change bilateral relations if Iran is willing to change its behavior. Vance revealed that the memorandum is about one and a half pages long and relatively general in content; many details will be finalized during the subsequent 60-day technical negotiations. Iran's Deputy Foreign Minister previously stated that after the signing of the memorandum of understanding between the US and Iran on the 19th, Iran will initiate subsequent negotiations depending on the US's fulfillment of its commitments. Vance also emphasized that the US attitude towards Iran is based on verifiable actions and results, not trust. If Tehran fails to fulfill its commitments, the US will reassess all options, including restoring economic sanctions, reimposing blockade measures, and even launching another military strike.
Domestic News
Several domestically produced high-speed optical communication chips have entered mass production; domestic optical fiber production capacity is projected to extend to 2027.
This year, the AI computing power wave has swept the globe. If we compare large AI models to the most powerful brains, then optical communication is the "high-speed blood vessels" that deliver massive amounts of data to them. Over the past year, multiple high-speed optical communication chip products adapted to supercomputing centers have completed process verification and have successively entered the mass production and delivery stages, continuously filling the gap in the domestic supply of high-end optical chips. As the core medium for information transmission, optical fiber is a key infrastructure connecting computing power and data. This year, the sales of optical fiber products of a company in Wujiang, Suzhou, have increased by more than 35% year-on-year. The rapid growth in demand for new optical fiber products from data centers has led to a continuous supply shortage for this company's products. "Our orders are almost full every month. We focus on selecting major customers and plan our future production capacity. Currently, our production capacity is planned to extend to the first quarter of 2027." (CCTV Finance)
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