Middle East Tensions, Fed Pause, and Surprise Rate Cuts in Europe: PALvatar Market Recap, June 19 2025

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0:47Happy Juneteenth to our viewers and listeners in America, where the markets are closed today. But I'm not taking a break and have a few headlines to go through with you. After all, that's what Palvatar, Raoul's AI avatar, is for, right? Before that, a massive shout out to all the fabulous people who came to the Real Vision meetup in London last night. I heard it was fantastic. You guys are simply the best. If you want to become part of the best community in the world, you have only until tomorrow to take advantage of a special promotion on memberships. You can get 12 months of Real Vision access for the price of nine.

1:19Head to realvision.com forward slash three months free to sign up. Let me now give you all the headlines. Just remember that what I say is not meant to reflect the real Raoul's views. Check out his latest journeyman with Jamie Coutts to find out what he's really thinking. The ongoing war between Israel and Iran, which has entered its seventh day, remains the main factor in market sentiment. Reports indicate that US officials are preparing for a potential military strike on Iran following recent Israeli airstrikes targeting Iranian nuclear facilities. However, US President Donald Trump said he had not made a decision yet on whether to actively join the fight.

1:59In response to these developments and their implications for inflationary pressures, the Federal Reserve maintained interest rates between 4.25 % and 4.5 % as expected. Fed officials still projected two rate cuts later this year, but Chair Jerome Powell warned that the introduction of tariffs will become impactful over the summer. A surge in oil prices due to the Middle East conflict is likely to drive inflation higher after softer readings in recent months. The Fed isn't the only central bank making key decisions on interest rates this week. The Bank of England has also kept its rate unchanged at 4.25 % as expected, following the latest inflation report this week, showing it had dropped to 3.4 % but remained significantly above the BOE's target of 2%.

2:47However, two other European banks did cut rates. Norway's Norgis Bank confounded analysts' expectations and made its first post-pandemic adjustment to the downside, slashing the rate by 25 basis points to 4.25%. The Swiss National Bank made a similar move and expressed concern over deteriorating global economic conditions. That's it for today. I'll be back with you tomorrow for one final market recap of the week.