Key facts
- The Federal Reserve's first policy meeting under new Chair Kevin Warsh is scheduled amid inflation concerns.
- The Bank of Japan is widely expected to raise its key interest rate.
- The G7 summit will convene in France, with artificial intelligence expected to be a prominent topic.
- U.S. President Donald Trump is scheduled to attend the G7 summit.
- Major U.S. stock indexes have recently pulled back after strong rallies, particularly in technology shares.
- U.S. consumer inflation in May increased at its fastest pace in three years.
The U.S. stock market faces a potential wildcard as the Federal Reserve holds its first policy meeting under new Chair Kevin Warsh amid concerns that interest rate hikes to combat inflation could dampen enthusiasm for equities. Major stock indexes have recently cooled off after strong runs, with technology shares leading the declines.
Investors will be closely watching Warsh's communications for insights into the Fed's future monetary policy direction, including potential rate adjustments and balance sheet strategies. While a rate hike is not widely expected at this meeting, recent economic data, including a three-year high in consumer inflation in May, suggests a hawkish outlook may be developing.
Internationally, the Bank of Japan is expected to raise its key interest rate, and the G7 summit in France will address critical global issues, including artificial intelligence and economic security, with U.S. President Donald Trump in attendance.