Murky situations

Daily update

US Treasury Secretary Bessent warmly endorsed Federal Reserve Chair Warsh, describing Warsh as competent and capable of lowering inflation. Such endorsements are not unusual, but as Warsh had to deny being US President Trump’s “sock puppet” this sort of intervention might shape perceptions of political influence. US inflation should fall as the inflationary effects of administration policies (tariffs, war) fade, rather than as a result of Fed policy actions.
There are several Bank of England speakers, but as expectations for a UK policy shift are low this is not perhaps very interesting. The ECB’s Nagel may get more attention, though Nagel is hardly likely to present the recent policy error as being anything other than necessary (whatever the problem, Nagel’s instinct is seemingly to raise rates in response).
The Gulf situation remains murky—there is a debate about where the proceeds from unfrozen Iranian assets might be spent. Investors’ bias to optimism remains, however. Crude oil prices are a little lower. Trump’s political challenge is that gasoline prices remain above the pre-war USD 3 per US gallon, which US consumers are inclined to remember as the “fair” price.
The data calendar is very quiet, with German June ifo business sentiment polls the only item likely to provoke a flicker of interest.